64 Cal. 301 | Cal. | 1882
Lead Opinion
By an act approved April 4, 1870, the legislature authorized the several counties of this State to aid (under certain conditions and qualifications) in the construction of railroads by the issue of county bonds payable within twenty
“ Whereas, the board of supervisors of Santa Cruz County, State of California, propose that said county shall aid in the construction of a railroad of not less than a three-foot gauge, and beginning at or near the Pajaro depot, on the Southern Pacific Railroad, in the county of Monterey, and running thence in the most practicably direct route through the county of Santa Cruz, crossing the Pajaro River near Watsonville, and crossing the San Lorenzo River between the county road leading to Soquel and the bay of Monterey, and thence along or near the coast to the boundary of said county, near the southeast corner of the Point New Year’s Ranch, by the issue of county bonds, payable within twenty years, and bearing interest, payable semi-annually, at the rate of seven (7) per cent per annum, to the amount of six thousand dollars per mile, but not exceeding in the aggregate the sum of two hundred and forty thousand dollars, such aid to be in lieu of the aid of one hundred thousand dollars heretofore authorized to be granted in the construction of a railroad connecting the town of Santa Cruz with the Southern Pacific Railroad; and, whereas, the Santa Cruz and Watsonville Railroad Company have agreed that the contract entered into by said company with the said county, dated January 18, 1872, and entered on the records of said board, in vol. 3, page 184, and following, shall be deemed canceled in case the railroad aid herein proposed shall be granted. Now, therefore, it is ordered, and notice is hereby given, that at the next general election, to be held on the 5th day of November, 1872,*305 there shall be submitted to the electors of Santa Cruz County, the question whether the board of supervisors of Santa Cruz County, in lieu of the aid of one hundred thousand dollars, heretofore authorized to be granted in the construction of a railroad connecting the town of Santa Cruz with the Southern Pacific Railroad, at or near the town, of Watsonville, and upon the cancellation of the said contract of the said county with the Santa Cruz and Watsonville Railroad Company, shall be authorized to grant upon terms which appear to them advantageous to the county, the aid of the county of Santa Cruz in the construction of a railroad of not less than a three-foot gauge, on the route hereinbefore described, to an amount of not exceeding in the aggregate the sum of two hundred and forty thousand dollars, in the bonds of Santa Cruz County, as proposed by said board, to be issued at the rate of not more than six thousand dollars per mile, for every mile of main track actually constructed; all ballots cast in favor of said proposition shall contain the words ‘Railroad Aid, Yes/ all ballots cast against said proposition shall contain the words ‘Railroad Aid, No.’ Said election shall be held in all the election precincts in said county, .... which order Avas published for the period of thirty days in íavo neAvspapers printed and published in the county of Santa Cruz, in accordance Avith such notice.”
On the 5th day of November, 1872, a general election was held in the county of Santa Cruz, and at such election a majority of the electors voting cast their Arotes in favor of granting aid to the railroad mentioned in said order, and on the 11th day of that month the board of supervisors, after canvassing the votes, published and declared that a majority of the electors voting at such election cast their votes in favor of granting the railroad aid mentioned in said order, and thereupon caused the proper record thereof to be entered in the “Minute Book” of its proceedings. On the 15th day of June, 1873, the board of directors of the Santa Cruz Railroad Company (the same being a corporation duly organized and existing under the laws of this State) passed a resolution authorizing the president of the company to apply to the board of supervisors for aid in the construction of its road at the rate of six thousand dollars per mile in county bonds, and on the 4th day of August, 1873, the board
“ This contract made and entered into on the fourth day of August, A. D. 1873, by and between the .county of Santa Cruz, in the State of California, acting by and through the board of supervisors of said county, as the party of the first part, and that certain corporation, organized, acting, and existing under and by virtue of the laws of said State, and known, designated, and called the Santa Cruz Railroad Company, as the party of the second part.
“ Witnesseth, that the board of supervisors of said county having, by an order duly made on September 25, 1872, and recorded at large in volume 3, pages 236, 237, 238, of the minutes of the proceedings of said board, proposed that said county shall aid in the construction of a railroad of not less than a three-foot gauge, the route of which road is definitely described in said proceedings as beginning at or near the Pajaro depot on the Southern Pacific Railroad; thence running in the most practically direct route through the counties of Monterey and Santa Cruz, crossing the Pajaro River near Watsonville, and crossing the San Lorenzo River between the county road leading to So quel and the bay of Monterey; and thence along or near the coast to the boundary of said county near the southeast corner of the Point New Year’s Rancho, by the issue of county bonds, payable within twenty years, and bearing interest, payable semi-annually, at the rate of seven per cent per annum, to the amount of six thousand dollars per mile, but not exceeding, in the aggregate, the sum of two hundred and forty thousand dollars; such aid to be in lieu of the aid of one hundred thousand dollars heretofore authorized to be granted in the construction of a railroad connecting the town of Santa Cruz with the Southern Pacific Railroad; and the board of supervisors of said county, under and in pursuance of an act of the legislature of said State, approved April 4, 1870, and entitled ‘ an act to empower the board of supervisors of the several counties of the State to aid in the construction of a railroad in their respective counties,’ and of the Act of April 4, A. D. 1870, supplemental thereto, having, at the election held in said county on the 5th day of November, A. D. 1872, of which election at least thirty*307 days’ notice was given by publication once a week in a newspaper printed and published in said county, which notice stated the day on which, and the places where, such election was to be held in said county, and the amount of bonds of said county to be issued for railroad aid, and definitely described the route of the railroad for which aid was proposed, submitted to the qualified electors of said county the question whether such railroad aid shall be granted by said county to aid in the construction of a railroad on the route hereinbefore described; and at such election a majority of the electors voting at such election having cast their votes in favor of such railroad aid, and the result of said election, after a full and fair canvass by said board, having been declared by said board to be in favor of granting such railroad aid, and the sum of two hundred and forty thousand dollars, authorized by the said votes as aforesaid, to be granted in and to such railroad, being less than five per cent of the. value of the taxable property of said county, and no aid whatever to any railroad ever having been granted by said county; and a certain agreement dated January 18, A. D. 1872, between said county and the board of supervisors thereof, and the Santa Cruz and Watsonville Railroad Company, having been fully and forever canceled and annulled, and said county released and discharged from all liability thereunder, and covenants therein; and the said party of the second part, having been heretofore duly organized as a corporation under the laws of said State for constructing and maintaining a railroad on the entire route first hereinbefore mentioned and described, and proposing to construct on said route, first, the section of such railroad between a point at or near said Pajaro depot and a point on the westerly side of said San Lorenzo River, and within the corporate limits of the town of Santa Cruz, which point last referred to is hereafter to be located by said party of the second part; and said party of the second part having solicited the said board to grant the aid of said county in the construction of such railroad, and the terms offered by said party of the second part appearing to said board to be advantageous to said county, and it appearing that said county will be greatly benefited by the construction of such railroad, or any part thereof; now, therefore, this contract witnesseth, that in consideration of the premises and of the*308 agreements herein named, to be done and performed by said party of the second part, the said party of the first part has agreed and hereby does agree with said party of the second part, to issue, deliver, and donate unto said party of the second part, in aid of the construction of such railroad, bonds of the said county of Santa Cruz, in amounts and at the times, and upon the terms as herein stated; said bonds, as herein provided, shall be payable in gold coin to said party of the second part, and to the holders of such bonds within twenty years from the date of their issue, at the office of the treasurer of said county, and shall bear interest in like coin at the rate of seven per cent per annum, and the instalments of interest shall be payable semiannually on the first Mondays of January and July of each year on coupons to be issued and delivered with such bonds, and each of such bonds shall be of the denomination of not less than one hundred dollars, nor more than one thousand dollars, signed by the chairman of said board and by the treasurer and clerk of said county and under the seal of said county, the interest coupons to be signed by the treasurer and clerk of said county. Such bonds are to be prepared for signing in the following form, to wit: Number -. State of California. -dollars. Bond of the county of Santa Cruz,” etc., etc.
The contract further provides that when five miles of the road are completed, and a construction train has been run over the same, there shall be issued to the company bonds of the county to the amount of thirty thousand dollars, and upon the construction of every mile of the track thereafter, and the passage of a construction train over the same, there shall be issued to the railroad company bonds of the county to the amount of six thousand dollars. The contract then proceeds to provide for a notice to be given of the construction of the road as it-progressed, for an examination and inspection of the same,'for an acceptance thereof by the county, and for the issue of bonds as the road was built, at the rate of six thousand dollars per mile. There are numerous other clauses in the contract, which it is unnecessary to notice, for the purposes of this opinion.
It appears from the evidence in the case that the railroad company commenced work on the first section of its road, and
It further appears that on or about the 11th day of December, 1874, a suit was commenced by one William H. Patterson in the District Court of the Twentieth Judicial District against the board of supervisors of the county of Santa Cruz, praying for an injunction to restrain and enjoin the defendants from issuing to the railroad company any bonds on account of the construction of said road, and thereupon an injunction was issued in pursuance of the prayer of the complaint. The case of Patterson v. The Supervisors was afterwards tried upon its merits, and on the 23d day of February, 1876, a decree was entered therein declaring that the proceedings of the board were legal and valid; that the issuance of the bonds should not be in any manner restrained or enjoined, and thereupon the injunction previously issued was dissolved.
After the judgment of the Twentieth District Court, dissolving the injunction referred to above, that is to say, on or about the 25th day of February, 1876, the board of supervisors of Santa Cruz County issued and delivered to the Santa Cruz Railroad Company thirty thousand dollars of bonds, each of which was in the following form: —
“In pursuance of an act of the legislature of the State of California, entitled ‘ an act to empower the board of supervisors of the several counties of the State to aid in the construction of a railroad in their respective counties/ approved April 4, 1870, and of an act supplemental thereto, approved April 4, 1870, and in accordance with the terms of a contract entered into by the board of supervisors of said county on the 4th of August, 1873, with the Santa Cruz Railroad Company, which said contract is entered upon the minutes of the board of*310 supervisors in volume 3, pages 279, 280, 281, 282, 283, 284, 285, 286.
“ The county of Santa Cruz owes and will pay at the office of the county treasurer in the town of Santa Cruz, State of California, to. the Santa Cruz Railroad Company, or the holder of this bond, within twenty years from the date of these presents, the sum of one thousand dollars in United States gold coin, with interest thereon at the rate of seven per cent per annum in like gold coin, from the date hereof until paid; interest payable semi-annually on the first Mondays of January and July of each year, on the surrender to said county treasurer of the coupon for said interest.”
The coupon attached to each of the bonds is in the following form:—
“ Coupon No. 41. On the 23d day of February, A. D. 1896, the county of Santa Cruz will pay to the Santa Cruz Railroad Company, or bearer, at the county treasurer’s office, ten and twenty-one one-hundredths dollars in United States gold coin, interest due on bond No. 1.”
On the 20th day of March, 1875, and at divers times between that date and the 15th day of November of that year, the Santa Cruz Railroad Company presented and filed with the board of supervisors written notices and communications informing them of the completion of fourteen additional miles of the road, and thereupon proceedings were regularly taken by.the board to inspect and examine the sáme, and after such examination and inspection the following order was passed: —
“ It is therefore ordered by the board of supervisors of the county of Santa Cruz, that there be issued and delivered to the Santa Cruz Railroad Company bonds of said county of Santa Cruz to the amount of eighty-four thousand dollars, in sums of one thousand dollars each, payable within twenty years of their date in United States gold coin, and bearing interest in like coin, at the rate of seven per cent per annum from their date, and interest payable semi-annually on the first Mondays of January and July of each year, in pursuance of the terms of said contract between the county of Santa Cruz and the Santa Cruz Railroad Company, and that said bonds be signed by the chairman of this board and by the county treasurer and county*311 clerk, and. under the seal of said county, and the interest coupons to be signed by said treasurer and said clerk.
It is further ordered that each of the bonds issued to the said railroad company under said contract shall be of the denomination of one thousand dollars.”
In pursuance of the above order, bonds were issued to the Santa Cruz Railroad Company to the amount of eighty-four thousand dollars. These bonds were in form similar to the bonds for thirty thousand dollars previously issued to the railroad company
All of these bonds were, within three months from the issuance thereof, sold and disposed of by the railroad company, and on the 2d day of August, 1879, they were purchased and paid for by the plaintiff, the Nevada Bank of San Francisco, in the ordinary course of business, at the rate of ninety-five cents on the dollar, arid were purchased under the belief that the same were legal and valid.
On the 3d day of January, 1881, the coupons on the bonds which fell due on the first of that month, were presented to the defendant, the treasurer of the county of Santa Cruz, and payment thereof was demanded, which was refused by the defendant, although he at that time had sufficient funds on hand specially provided by law for that purpose, to pay said coupons; and this is an application to the court for a peremptory writ of mandamus to compel the defendant as treasurer of said county to pay such coupons.
There are other facts presented by the pleadings and report of the referee to whom this case was referred for the purpose of taking aud reporting the facts therein, but we deem it unnecessary to consider them.
The question presented for our decision is simply this: Are the bonds in the hands of the plaintiff, claiming the same as a bona fide purchaser for value, valid and binding upon the county of Santa Cruz ?
The Act of April 4, 1870, as appears from its title, as well as from its clearly expressed object, was intended to “ empower the-board of supervisors of the several counties of the State to aid in the construction of a railroad in their respective counties,” and the only restrictions imposed upon the board were that the
“ Now, therefore, it is ordered and notice is hereby given that at the next general election to be held, etc., there shall be submitted to the people the question whether the board of supervisors shall be authorized to grant, upon terms which may appear to them to be advantageous to the county, the aid of the county of Santa Cruz, as folloxvs: When five miles of said first section of said railroad shall have been constructed and a construction train run over the same, there shall be issued and delivered to said party of the second part by the said party of the first part, bonds of said county to the amount of thirty thousand dollars, and upon the construction of every mile of track thereafter of such railroad, and the passage of a construction train over the same, there shall be issued and delivered as last aforesaid, to the said party of the second part, bonds of said county to the amount of six thousand dollars, and so on until the construction of said railroad is completed”; and it xvas provided in the proposition submitted to and adopted by the vote of the people, that bonds should be issued at the rate of not more than six thousand dollars for every mile of main track actually constructed. It is claimed on behalf of defendant, first, that the contract was an unilateral one, and therefore not binding upon the county; second,- that the board of supervisors had no poxver to enter into a contract for the construction of a railroad xvhich did not extend over the entire route from Pajaro depot on the south to Point New Year’s Ranch on the north;
If the contract did not contain any stipulation on the part of the railroad company to build the road or to do any other act, we can see no good reason why the party of the first part should not be bound by its promise or agreement, provided the railroad company, acting upon such promise or agreement, proceeded to construct the road in accordance with the conditions set forth in the contract. It may be that the county could have withdrawn its promise of aid at any time before work was done on the faith of the promise; but after the work was done and the contract was executed, the county could not escape from its liability on the ground that the company did not in the first instance obligate itself to construct the road. If A. promise B. to pay him a stipulated sum for a certain service, and B. renders the service without any contemporaneous promise to do so, can it be doubted that A. will be bound by his promise? The following authorities are referred to in support of the point that the contract was binding on the county after performance by the company even if it was unilateral. (Barnes v. Perine, 9 Barb. 211; Robertson v. March, 3 Scam. 198; Chitty on Contracts, 64; Train v. Gold, 5 Pick. 379; White v. Baxter, 71 N. Y. 254.)
But is it true that the railroad company did not agree or promise to do anything on its part? The contract contains the following agreement or promise by the company: “And the said party of the second part (the company) has agreed and hereby does agree to and with the said party of the first part, to build, construct, and finish such last-named bridge (across the San Lorenzo River), and to lay the track of said railroad from the easterly bank of said last-named river to a point on the westerly side thereof within three hundred feet of said bay, in three months after said bonds of said county to the amount of ninety thousand dollars shall have been issued and delivered to said party of the second part.” There is also a clause in the contract to the effect that the aid is granted in lieu of a former aid of one hundred thousand dollars, which is surrendered and canceled by the express terms of the contract. Here we find a sufficient consideration, if any were necessary, for the promise on the part of the county.
In this connection it is proper to notice the fact that the Act of April 4, 1870, does not provide for a contract between the county and the railroad company, but simply empowers the county to aid in the construction of railroads upon certain terms. The aid authorized by the law, and intended by the parties, was to be granted as the work progressed, in order to assist and enable the company to pay for the work and construct the road, and it never was contemplated that the entire work should be completed and paid for by the company before the bonds should be issued. (Kenicott v. Supervisors, 16 Wall. 466.) This would not be aiding the company in the construction of the road, but would simply be reimbursing the company, in Avhole or in part, its money expended in building the road. This vieAV is fortified by the proposition submitted to the electors, which Avas, that the county should aid the railroad company in the construction of its road by issuing and delivering to it bonds “ at the rate of not more than six thousand dollars per mile for every mile of main trade actually constructed.” The bonds should have been issued for every mile Avhen constructed (after the completion of the first five miles), and it is fair to presume that they would have been so issued if the board had not been enjoined by the order of the Twentieth District Court.
The Bank of Nevada purchased the bonds for value, Avithout notice of any infirmity in them, and the only question is one of power in the board to issue them. (Cromwell v. The County of Sac, 96 U. S. 51; 1 Dillou Muni Corp. § 515, and authorities there cited.) If the board did not have the power to issue the bonds there could be no such thing as a bona fide holder of them, as any purchaser Avould be held to have notice of the fact, where there was a total want of authority.” (Township of East Oakland v. Skinner, 94 U. S. 258.) “The folloAving doctrines are too well settled to be any longer open to question. A bona fide purchaser of negotiable paper for value before maturity takes it freed from all infirmities in its origin, .unless it is absolutely
It is claimed in the case now under consideration that there was a want of power on the part of the board of supervisors to make any contract or to issue any bonds for a portion of the road, and that is the only ground upon which the question of power can arise. There is no charge of fraud or unfair dealing on the part of the board, and the most that can be said against its action is that it provided in the first place for the construction of that section of the road lying between the city of Santa Cruz and the Pajaro depot. In this we can perceive no just cause of objection or complaint, for that was the most important section of the road; and its completion brought a large portion of the county of Santa Cruz into direct communication with the Southern Pacific Hoad, and thereby opened a lengthy line of travel north and south with other portions of the State.
It does not appear that there was not an intention on the part of the board of supervisors to extend the road in a northerly direction from Santa Cruz to its northerly, terminus, and after appropriating one half of the two hundred and forty thousand dollars of the bonds to the first section of the road—about one half of the entire route— there remained to be issued a corresponding amount of bonds to aid in the construction of the other half of the railroad.
It remains only for us to say that in our opinion the bonds
There is but one other question to be determined, and that relates to the effect of the Act of January 14,1874, repealing the Act of April 4, 1870. This question has been passed upon in several cases. It is found in the report of the referee that the Santa Cruz Bailroad Company commenced work on its road, under the contract between it and the county, on the 25th day of October, 1873, and prosecuted the same Avith reasonable diligence; but the repealing act Avas not passed until January 14, 1874. In vieAAr of the facts of this case the validity of the bonds Avas not affected by the repeal of the Act of April 4, 1870. (Town of Concord v. Savings Bank, 92 U. S. 630; Steamship Company v. Joliffe, 2 Wall. 450; Montgomery v. Masson, 16 Cal. 189.)
Let the Avrit issue.
Concurrence Opinion
The only objection to the validity of the bonds Avhich seems to us to merit any serious consideration is that after a majority of the electors voting upon the proposition to issue bonds to aid in the construction of a railroad upon a certain specified route between tAAro certain specified points had voted in favor of granting such aid, the board of supervisors entered into an agreement Avhereby said board agreed to issue bonds to the amount of six thousand dollars per mile, for the construction of a railroad on said route for a distance less than the entire distance betAveen the termini mentioned in the proposition submitted to said electors. And that objection is founded upon the hypothesis that it AAras the understanding of the electors Avho voted upon the proposition that in consideration of the aid granted the entire road should be constructed.
There is but one Avay in which Ave can arrive at .the intention of the electors who voted upon the proposition to grant aid, and that is by an inspection of the proposition itself.
The proposition voted upon, as stated in the notice of the election, Avas substantially as folloAvs: That the board of supervisors should be authorized to grant [in lieu of the aid of one
The vote was in favor of aiding in the construction of a railroad on a route “ beginning at or near Pajaro depot, and ending at the boundary of said county near the southeast corner of the Point New Year’s Ranch.” And the board of supervisors Avas authorized “ to grant, upon terms which to them ” might “ appear advantageous to the county,” the aid of the county in the construction of a railroad on that route, in the bonds of the county, “ to be issued at the rate of not more than six thousand dollars per mile for every mile of main track actually constructed,” until the aggregate of the bonds so issued should amount to two hundred and forty thousand dollars.
Noav, it is not claimed that so much of the road as has been actually constructed Avas not constructed on the route designated in the proposition which Aras submitted to the electors of the county. But it is claimed that the board of supervisors Avas not authorized to agree to issue bonds at the rate of six thousand dollars per mile, for any number of miles less than the whole number between the terminal points of the route. The board, however, Avas expressly authorized to grant said aid upon terms which might appear to it to be adArantageous to the county, and if it appeared to it to be advantageous to the
The board wTas not bound to issue bonds at the rate of six thousand dollars per mile for every mile of railroad which might be constructed between terminal points mentioned in the proposition to grant aid. But it was authorized to issue them at the rate of six thousand dollars per mile for every mile of main track actually constructed. And whether it issued them at the rate of six thousand dollars per mile for a part of the distance, or for the entire distance, it was issuing them in aid of the construction of a railroad on the route designated in the proposition upon which the electors had voted. By aiding in the construction of nineteen miles of railroad on the route designated, the county was aiding pro tanto in the construction of it from one to the other of the terminal points mentioned in said proposition. If it was the intention of the electors voting upon the proposition to grant the aid of the county in the construction of a railroad upon the route specified, that said aid should not be granted except upon the condition that a railroad should be constructed the entire length of the route, it must be admitted, we think, that they have failed to express that intention. And if they have, it is no part of the duty of this court to supply the omission. It is our duty to construe the contract which the parties have made, not to make on for them.
The construction which we have put upon the vote of a majority of the electors who voted upon the proposition to issue bonds in aid of the construction of said railroad, is in accord with that which the board of supervisors practically put upon that vote • and the people of said county acquiesced in that construction for a considerable period of time by offering no resistance to the issuing of the bonds, and by paying the interest upon them semi-annually for a period of more than four years, three of which preceded the purchase of said bonds by
If that principle can be applied to a municipality, it is difficult to conceive of a case to which it could be applied more
That which it is now claimed constituted a condition precedent to the power to issue the bonds, is certainly not clearly expressed in the proposition submitted to the electors, and for which a majority of them voted, and it seems to us inexplicable that if such a condition had been supposed to exist, the board of supervisors should have been permitted to issue the bonds in utter disregard of it, when any tax-payer in behalf of himself and all other tax-payers of the county could have intervened and prevented the issue of them. And it is still more inexplicable to us that under such circumstances the interest on the bonds should have been paid for a period of four or five years without a word of protest from any tax-payer, so far as we are advised. “ They had an opportunity, before innocent third persons could be injured or committed to the acts of their public agents, to enjoin the proceeding and protect themselves; they did not seek that protection; but now when they have received all the fruits of the contracts of their agents from third persons who have acted upon their recognition of the authority of their agents, they ask the privilege of denying this recognition, and thus escape from their obligations. It is too late for them to do so as against innocent third persons. They are concluded not simply by acts of their public agents but their own.” v (State v. Van Horne, 7 Ohio St. 327.)
If the construction of the power conferred upon the board of supervisors, for which the respondent contends was clearly the correct one, we might be compelled to hold that the petitioner was chargeable with notice of the want of authority in the board of supervisors to enter into the agreement which they entered
McKbístry, J., concurred.
I concur upon the second ground'discussed in the opinion of Mr. Justice Sharpstebí and for the reasons by him given.
Dissenting Opinion
Under the Act of April 4, 1870, (Stats. 1869—70, p. 746), a vote was had authorizing the granting of aid, and a contract had been made between the board of supervisors of Santa Cruz and the Santa Cruz and Watsonville Bailroad Company, by which aid to the amount of one hundred thousand dollars was granted to that company to assist in the construction of a railroad from the town of Watsonville to the town of Santa Cruz. Bor some reason the work did not progress. On the 25th of September, 1872, the board of supervisors made an order for an election to be held upon the proposition of granting aid for the construction of a railroad from a point on the line of the Southern Pacific Bailroad, at or near the Pajaro, depot, thence through the county of Santa Cruz to the northern line of the county, near Point New Year’s Banch, said aid to. be six thousand dollars per mile, and not exceeding the aggregate, of two hundred and forty thousand dollars, interest-bearing bonds of the county to be issued therefor; said aid to be in lieu of the aid of one hundred thousand dollars theretofore authorized to be granted. In pursuance of this order an election was held, and the result was in favor of the proposition.
Thereafter, on the 15th of June, 1873, the Santa Cruz Bail-road Company made its application for aid. On the 18th of June, 1873, the articles of incorporation - of the Santa Cruz Bailroad Company were filed, such incorporation being for the purpose of constructing, conducting, and maintaining an iron railroad within the counties of Monterey and Santa Cruz, commencing at a point at or near Pajaro station, on the Southern Pacific Bailroad, in the county of Monterey, and running thence
No road has been constructed over any part of the projected route between the town of Santa Cruz and the northern boundary line of the county, nor has such construction been or attempted to be provided for.
This proceeding is a petition for a writ of mandate requiring the respondent as county treasurer, to pay the coupons on the bonds held by petitioner. The petitioner claims as well, that the bonds were properly issued, and are a legal charge upon the county, as that, it being a bona fide holder for value, payment cannot be disputed.
In our opinion the question of the rights of bona fide holders of bonds does not arise and is not for consideration in this case. The bonds on their face refer to the statute authorizing- the granting of county aid, and to the contract between the board of supervisors and the railroad company. Therefore the bonds are as though the statute and the contract were written, word for word therein. The statute authorized the granting of county aid; the election was held thereunder, and the matter
" The Supreme Court of the United States in Township of East Oakland v. Skinner, 4 Otto, 255, says: “We have held that there can be no bona fide holding where the statute did not in law authorize the issue of the bonds. The objection in such case goes to the point of power. There is an entire want of
As was said above, although there was powe* to issue bonds in a certain case, viz., for the construction of the entire distance, yet there was no power to issue in aid of the construction of a less distance. That it was the intent of the railroad company to build, and of the board of supervisors to have built, a part only, is clearly manifest from the proceedings. The board declared (see contract between the board and the railroad company) : “ It appearing that said county will be greatly benefited by the construction of said railroad or any part thereof.” The board had not power to declare any benefit from a part. The people had by their votes declared the extent of the line of the road, and the board had no more power to diminish its length than to increase the amount of aid. The intent to avoid compliance with the law is apparent upon the face of the documents referred to in the bonds, and the purchaser was bound to take notice. The bonds were not like a bill of exchange or promissory note, “a courier without luggage”—but these transactions were tied to them and could not be shaken off.
The Supreme Court of the United States, in School District v. Insurance Co. 13 Otto, 710, said: “As the bonds recite that they were issued under this act [an act which the court held not to give authority for issuing the bonds in question], and that the vote was taken under it, we cannot see that power, purposed to be exercised under other and very different circumstances, can be invoked to give validity to an act which is void by the authority under which it professed to be acting.”
It has been repeatedly urged that the holders of bonds have innocently invested their money, and should, as innocent holders of public securities, be protected. They are not, however, the only persons to be considered. Tax-payers are equally innocent; tax-payers are not to be subjected to extraordinary burdens, or even ordinary burdens, except by law.
To this case may be applied the language used by Justice Field, concurred in by Chief Justice Waite and Justices Grier and Miller, in dissenting from the judgment of the court in
There are even stronger objections against the validity of the bonds involved in the case at bar than those considered in the case above referred to.
The length of time which elapsed after the making of the contract and the issuance of the bonds, before the purchase of petitioner, may not be a controlling consideration, but it is certainly significant in one respect. The contract was made August 4, 1873, and the bonds were issued in February and March, 1876; the petitioner did not purchase until about three years and a half thereafter, to Avit, August 7, 1879. During all that period no step had been taken by the railroad company or the board of supervisors for carrying out the Avill of the people as expressed in granting the aid.
The petitioner is not in a position to say it Avas not fully advised of all the proceedings. While it had the proposed purchase of the bonds under consideration, it caused to be examined the Act of April 4, 1870, the popular vote upon the question of extending the aid, the contract bctAveen the board of supervisors and the Santa Cruz Railroad Company, and it had 'the bonds before it. It also caused to be examined an action then pending by the railroad company against the board of supervisors for the further issuance of bonds, AAdiich action was being resisted upon the ground, among others, that no vote had been had for the granting of aid for any less distance than the whole. The writ should be denied.
McKee, J., and Thornton, J., concurred with Myrick, J.
[Note. — After the publication of the foregoing opinions, a writ of error was allowed to the Supreme Court of the United States. The proceedings in that court have lately terminated, without trial there, and the judgment of this court remains in force.]
