Lawrence Lewis.

American and English corporation cases : a collection of all corporation cases, both private and municipal (excepting railway cases), decided in the courts of last resort in the United States, England, and Canada [1883-1894] online

. (page 62 of 73)
Online LibraryLawrence LewisAmerican and English corporation cases : a collection of all corporation cases, both private and municipal (excepting railway cases), decided in the courts of last resort in the United States, England, and Canada [1883-1894] → online text (page 62 of 73)
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KANSAS V. SCHOOL DISTRICT NO. 3, CHAUTAUQUA CO. 597

of our legislation. Even if there was a doubt if the State was to be in-
cluded in the language of the statute, that doubt should be resolved in
favor of the State."

In the case of Commonwealth v. Johnson, 6 Pa. St. 136, suit was
brought by the Commonwealth on the official bond of a prothonotary, for a
breach in failing to pay over to the State treasurer, taxes levied on fees
received by the prothonotary. The bond was filed in pursuance of the
provisions of the act imposing the tax, which provided that prothonota-
ries should give bond conditioned for the payment by them of all taxes
levied on them by virtue of the act, and that the effect, rights, and
remedies of said bond should be governed by the provisions of a former
act relating to sheriffs' and coroners' bonds. This former act provided
that coroners and sheriffs should give bonds conditioned for the faithful
performance of official duties, prescribed the form of the bond, and
further provided that no suit should be sustained by any court on such
bond unless brought within five years from its date. It was held that the
reference in the statute relating to prothonotaries* bonds to the statute
relating to sheriffs' bonds was not enough to incorporate in the former
statute the limitation clause contained in the latter. The court say:
•* The principle deducible from all the cases, English and American, is
that the Legislature shall not be taken to have postponed the public right
to that of an individual, unless such an intent be manifested by express
word or irresistible implication, and this principle is peculiarly applicable
to a plea of the Statute of Limitations interposed to bar a public claim.
I am not aware of any judicial construction of the act of 1803 (that relat-
ing to sheriffs' and coroners' bonds) in reference to this principle. If,
however, it be admitted that its clause of limitation would operate to bar a
suit by the commonwealth, it is by no means clear that the Legislature
intended to engraft this quality upon the act of 1830 (relating to prothon-
otaries' bonds) by the use of the words * effect, rights, and remedies of
said bond.' Full operation may be g^ven to these terms by referring
them to the object of the bonds contemplated by the act, the right to be
secured thereby, and the peculiar form of remedy afforded by the old act,
without making them a conduit for infusing into the late statute a doc-
trine at least partially destructive of the remedy. When we recollect that
this would be introductory of a new feature unknown to piyor and sub-
sequent legislation had in reference to the official bonds of these officers,
. . . and that it is in violation of the long recognized axiom that the
public right cannot be destroyed or compromised by the neglect of the
public agent, nothing short of language clearly and explicitly pointing to a
l^islative intent in conformity with the construction demanded by these
defendants would justify our sanction of it."

Where the State acquires Title after the Statute has begun
TO run, the Statute will continue to run against the State. —
Where the State takes as assignee of a claim on which the statute has be-
gun tQ run, it is said that the acquiring of title by the State will not stop
the running of the statute. Wood Lim. of Actions, p. 92, citing United
States V, White, 2 Hill (N. Y.), 59. In that case a promissory note was as-



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598 LIEBMAN V. CITY AND COUNTY OF SAN FRANCISCO.

signed to the United States before it was due. The court say that if the
statute had b^un to run against the note while in the hands of the assig-
nee, it would continue to run against the United States ; but that not
having begun to run against the assignee, it never b<^;an to run against
the United States.



Ltebman

V.

City and County of San Francisco.

(Advance Case, California, August 24, 1885.)

By an act of the Legislature of the State of California, passed April i»
1872. to open and establish a public street, to be named Montgomery-
Avenue, in the city and county of San Francisco, it was provided that the
value of land taken for the improvement, the damage to improvements
thereon or adjacent thereto, and all other expenses incidental to the pro-
ceedings, should be deemed the cost of opening the avenue, and should be
assessed upon property in a certain specified district, by a board of public
works to be created for that purpose. This board was to consist of the
mayor, the tax-collector, and the surveyor of the city and county of Saa
Francisco ; and the improvement was not to be commenced until the
owners of a majority of the frontage of the property to bear the burden of
the improvement, should petition the mayor of the city and county of
San Francisco, in writing, to have the improvement undertaken. The
board was thereupon to organize and proceed to prepare a report showing
the value of the land to be taken, and damage and benefits to property.
This report was to be open for inspection by all persons interested, and
was to be subject to revision by the county court as to matters shown in
the report. Held (approving and following the decision of the supreme
court of California in the case of Mulligan v. Smith, 59 Gal. 206), that as
only matters appearing in the report could be called in question in the
county court^ an order of that court confirming the report did not estop
the city and county of San Francisco from setting up as a defence that the
petition for the opening of Montgomery Avenue was not signed by the
owners of a majority in frontage of the property to bear the burden of the
improvement, the facts as to the petition not being included in the
report.

A municipal corporation is estopped to deny the truth of recitals con-
tained in municipal bonds, to the effect that all acts and formalities neces-
sary to the validity of the bond have been complied with, where such
recitals are made by duly authorized officers of the municipality, but not
otherwise.

Where the board of public works, described in the first paragraph of the
head-note, were, after the confirmation of their report, to issue bonds to



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LIEBMAN V. CITY AND COUNTY OF SAN FRANCISCO. 599

pay for the improvement, and were to raise enough money by assessment
each year to pay the interest on the bonds and to create a sinking fund
for the payment of the principal ; and it was, moreover, especially provided
that the city and county of San Francisco should in no event be liable
for the payment of the bonds or any part of them ; held, that the board
of public works provided for in the statute was not an agency of the mu-
nicipal corporation in the improvement of Montgomery Avenue, but that
it acted as agent of the State ; that the fact that the ♦itle to Montgomery
Avenue, when completed and paid for, was to vest in the city and county of
San Francisco did not indicate that the board was the agent of the
municipality ; and that the bonds issued by the board gave rise to no liabil-
ity on the part of said city and county of San Francisco.

Before Field, circuit justice, and Sawyer, circuit judge.
D, L, Delmasj A. L. Rhodes, and /. P. Hoge for the plaintiff.
GarbeTyTtiornton & Bisltop for the defendant.

Field, C. J. — This is an action against the city and county
of San Francisco to compel the payment of twenty factb.

coupons for interest, each amounting to thirty dollars, at-
tached to certain instruments designated in the pleadings as
Montgomery Avenue bonds. The plaintiff prays for judg-
ment that the coupons are valid obligations of the city and
county ; that there is due by it upon each of them the sum of
thirty dollars, with interest from the date of its maturity at
the rate of seven per cent per annum ; that the city and
county pay the amount thus adjudged due from the special
tax to be annually levied, assessed, and collected for that pur-
pose, pursuant to the act of the legislature of April i, 1872 ;
and that the plaintiff recover against it for the costs of this
action.

The validity of the bonds to which the coupons are at-
tached, and, of course, the validity of the coupons also,
depends upon that act, and the compliance in their issue
with its requirements. The object of the act was to open
and establish a public street in the city and county of San
Francisco, to be called Montgomery Avenue, and to take
private lands therefor. It described a strip of land by metes
and bounds, and declared that it was taken and dedicated for
such street, and that, when paid for, the title thereto should
vest in the city and county for that purpose, as the title of
other public streets was vested. It provided that the value
of the property taken, the damages to improvements thereon



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600 LIEBMAN V. CITY AND COUNTY OF SAN FRANCISCO.

or adjacent thereto, and all other expenses incidental to the
proceeding should be considered the cost of the opening of
the avenue, and should be assessed upon lands within a de-
scribed district in proportion to the benefits accruing there-
from, to be ascertained by a board of public works created
for that purpose. That board was to consist of the mayor,
the tax-collector, and the surveyor of the city and county of
San Francisco ; and whenever the owners of a majority m
frontage of the property which was to bear the burden of
the improvement, as they were named in the last preceding
annual assessment roll for the State, city, and county taxes,
should petition the mayor of the city and county, in writing,
for the opening of the avenue according to the provisions of
the act, the board was to proceed to organize by the elec-
tion of a president, and then to the performance of its pre-
scribed duties. It was, among other things, to ascertain
and report the cash value of the land taken ; and the damages
caused to the property along the line and within the course
of the avenue ; also, the benefits accruing from its opening
to the lots within the prescribed district.

The report was to remain at the office of the board for thir-
ty days for the inspection of parties interested, and notice
that it was thus open for inspection was to be published for
twenty days in two daily papers in the city and county.
Any person interested who was aggrieved by the action of
the board, as shown in its report, might, within the thirty
days, apply by petition to the county court, setting forth his
interest in the proceedings, and his objections thereto, for an
order on the board to file with the court its report, with such
other documents or data as might be pertinent thereto, which
were used by it in preparing the report. And the court was
authorized to hear the petition, and the board could appear in
response to it, and testimony could be taken in the matter.
After hearing and consideration, it was in the discretion of
the court to approve and confirm the report, or to refer it
back to the board, with directions to alter or modify it in
specified particulars. From the order of the county court,
an appeal could be taken to the supreme court of the State,
to review the matters complained of. Upon the final con-
firmation of the report, the board was required to prepare
and issue bonds> in sums of not less than one thousand dollars



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LIEBMAN V. CITY AND COUNTY OF SAN FRANCISCO. 6oi

each, for the amount necessary to pay and discharge all the
damages, costs, and expenses incurred. These bonds were to
be known and designated as the Montgomery Avenue bonds,
and made payable in thirty years from their date, and to bear
interest at the rate of six per cent per annum, payable semi-
annually at the oflBce of the treasurer of the city and county.
Coupons for the interest were to be attached to each bond.
The bonds were to be signed by all the members of the
board, and its seal was to be affixed to each. The coupons
were to be signed by the president.

Any person to whom damages for lands were awarded,
^ upon tendering to the board a satisfactory deed of convey-
ance of the property to the city and county, was entitled to
have bonds issued to him equal to the amount awarded. The
act also provided for the assessment and levy of an anual tax
upon the property benefited, for the payment of interest
upon the bonds, and to create a sinking fund for the redemp-
tion of the principal, the assessment to be "adjusted and dis-
tributed according to the enhanced values " of the respective
parcels of land, as fixed in the final report of the board.

But the act declared that the city and county of San Fran-
cisco should not, in any event whatever, be liable for the
payment of the bonds, nor any part thereof, and that any per-
son purchasing them, or otherwise becoming the owner of
any bond or bonds, accepted the same upon that express stip-
ulation and understanding.

The following is a copy of one of the bonds and coupons
issued under the act. The others are similar in form, differ-
ing from each other only in their number.

State of California

Board of Public Works

City and county (Number 205) San Francisco.

(Vignette.)

$1,000. Montgomery Avenue Bond. $1,000.

In Conformity
with an act passed by the people of the State of California,
represented in senate and assembly, entitled an act to open
and establish a public street in the city and county of San
Francisco to be called Montgomery Avenue, and to take pri-
vate lands therefor, approved April i, 1879, *he treasurer of
the city and county of San Francisco, State of California, will



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602 LIEBMAN V. CITY AND COUNTY OF SAN FRANCISCO.

pay at his office in said city and county, to the holder hereof,,
one thousand dollars in United States gold coin, with interest
at the rate of six per cent per annum, payable semiannually
in like gold coin, upon surrender of the corresponding cou*
pons, and that the principal sum is redeemable within thirty
years from the date of these presents.

It being understood and agreed that this bond may be re*
deemed by said treasurer as provided in said above-men-
tioned act of the legislature of the state of California.
In witness whereof the mayor, the tax-collector, and dty

and county surveyor of said city

and county of San Francisco,

composing a board of public

j Seal of the ) works, have respectively signed

( Board of public works. ) these presents, and the president

of the board of public works has

signed the annexed coupons as

of the first day of January, 1873.

William Alvord,

President of the board of public works and mayor of the city and

county of San Francisco,

Alexander Austin,
Tax<ollector and member of said board of public works.

Richard H. Stretch,
City and county surveyor and member of said board of public

works,
$30. Board of Public Works. Coupon No. 15.

Montgomery \ The treasurer of the city and county of San
M. A. B. > Francisco will pay bearer, at his office,
Av. Bond. ) thirty dollars, six months' interest
On bond \ j Due ist January,

No. 612. ) ( 1881.

Wm. Alvord,
President of board of public works.

From this brief statement of the act of April i, 1872, three
things distinctly appear: ist, that the petition of the owners
of a majority in frontage of the property to be charged with
the cost of the improvement was essential to the validity of
all subsequent proceedings taken for the opening of the av-
enue, including, of course, the issue of the bonds ; 2d, that



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LIEBMAN V. CITY AND COUNTY OF SAN FRANCISCO. 603

in no event could the city and county be held liable on the
bonds, and necessarily, therefore, not on the coupons attached ;
and, 3d, that every person purchasing or becoming the owner
of any bond took the same on that express stipulation and un-
derstanding.

The act in question was before the supreme court of the
State, and the subject of exhaustive consideration rulwob of
in Mulligan v. Smith, 59 Cal. 206. That was an VifSS^^^
action of ejectment to recover land claimed by the plaintiff
under a deed executed to him upon a sale of the premises for
the non-payment of a tax levied thereon to raise a fund to pay
the interest on the bonds. In the lower court, evidence was
introduced which tended to show that the petition to the
mayor, which was the essential initiatory step to the proceed-
ings for opening the avenue, had not been signed by the
owners of a majority in frontage of the property to be charged,
as shown by the names on the assessment roll of the previous
year ; and the court found that such was the fact. In the
supreme court, it was contended, as it had been in the court
below, that evidence to impeach the correctness of the peti-
tion in this respect was inadmissible ; and, also, that as the
petition was sufficient on its face, and had been accepted by
the mayor as sufficient, the defendant was estopped from
questioning its validity, or the validity of the proceedings
under it; and, also, that such estoppel followed from the
judgment of the county court confirming the report of the
board. But the supreme court held the evidence admissible,
and that the defendant was not estopped from showing the
insufficiency of the petition, either by the action of the mayor
in accepting it, or the judgment of the county court ; that
whilst it might be true that the mayor was called upon in the
first instance to decide upon the sufficiency of the petition,
there was nothing in the statute which made his determina-
tion conclusive, and precluded an inquiry into its validity
whenever the proceedings under it came up for judicial con-
sideration. In no part of the statute, said the court, did it ap-
pear that provision was made for notice to the property-owners
of the proceedings authorized to be taken before the mayor,
or by the board, or in the county court. Neither the mayor
nor the board was required to give notice of any kind until
the board had completed the report of its work. And the



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604 LIEBMAN V. CITY AND COUNTY OF SAN FRANCISCO.

notice then required was one of a general nature by publica-
tion, and was. only that the report was open for inspection.
Though any property-owner aggrieved by the action or de-
termination of the board, as shown in its report, could have
made his objections to the county court, they could not ex-
tend to the character or suflBciency of the petition. " Nowhere
in the statute," said the court, '' is the petition made part of
the report, or of the data or documents used in making it
Nor is it anywhere required that the board or the mayor shall
return it to the court or file it there or elsewhere. The court
had, therefore, no jurisdiction of the petition; no power to
adjudge upon its execution, and it could not assume jurisdic-
tion of it or by its judgment decide upon its sufficiency and
validity so as to conclude the defendant" These conclusions
of the court were concurred in by all its members, and sus-
tained in separate opinions of marked ability and learning by
three of them. All agreed that evidence to show the defect
in the petition, in not being signed by owners of a majority in
frontage of the property to be charged, was admissible, and
that the defect existing invalidated all the subsequent pro-
ceedings. *' When, therefore," said the court, " the legisla-
ture prescribed that a petition from the owners of a majority
in frontage of the property to be charged with the cost of the
improvement was necessary to set the machinery of the statute
in motion, no step could be taken under the provisions of the
statute until the requisite petition was presented. It was the
first authorized movement to be made in the opening of the
avenue. When taken, officers, who were to constitute and
organize a board of public works, were authorized to organ-
ize. Until it was taken, they had no such authority. They
could not legally act at all; or, if they acted, their pro-
ceedings would be unauthorized and void. The presenta-
tion of the petition required by the statute was, therefore,
essential."

The authorities cited in the several opinions show that
similar conclusions have been reached by the highest courts
of other States in analogous cases. Indeed, the rule is fun-
damental that where private property is to be taken for a
pmrrioH mott public improvement upon the petition of a majority
JSSS?TioK^or of those who are to bear its burden, the petition
of such a majonty must be made before proceed-



VRXTATB PEOF-
MRTT,



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LIEBMAN V. CITY AND COUNTY OF SAN FRANCISCO. 605

ings for the appropriation of the property can be had. This
is a condition which must be strictly followed. A failure to
comply with it will vitiate all subsequent proceedings. No
one, indeed, would contend that proceedings had, in such
cases, without the petition of any of the owners, would be
valid ; and a petition of a less number of the owners than that
designated by the statute would be equally ineffectual. If
one less than the required number may be omitted, so may
all. Nor is the rule at all affected by the doctrine that in a
certain class of cases evidence of such compliance is con-
clusively found in the action of officers required to consider
and determine that fact. That doctrine, as we shall presently
see, only applies to estop the obligors of a bond, and can have
no bearing or consideration in the present case, where the
bonds, to which the coupons in controversy are attached, are
neither in form nor in law the obligations of the city and
county.

The construction given by the supreme court of the State
to the act of April i, 1872, if not absolutely binding upon the
judges of the Federal courts, in cases arising under it, is cer-
tainly not to be disregarded and rejected, except stats coMgrauc-

r ,1 - . 1 . I TION OF 8TATUTB

for the most cogent and persuasive reasons, such followed.
as would leave little doubt of the error of the State court.
Conflicts between State and Federal tribunals in the interpre-
tation of State statutes are always to be avoided if possible.
The Federal courts will, therefore, follow the exposition of
the State courts unless it conflicts with or impairs the ef-
ficiency of some principle of the Federal constitution, or of a
Federal statute, or a rule of commercial or general law. In
this case, there is no such conflict or impairment. No prin-
ciple of Federal law is invaded, or rule of commercial or
general law disregarded. The construction given is one
we should unhesitatingly adopt had the supreme court, the
legitimate expounder of State statutes, never spoken on the
subject.

There was, it is true, an intimation by one of the judges, in
his opinion in Mulligan v. Smith, that in an action upon the
bonds, that being an action upon contract, a different rule
might exist, and that an estoppel might arise against the de-
fendant. It was, however, only an intimation to mark a
possible distinction in the proofs required in the two forms of



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6o6 LIEBMAN Z/. CITY AND COUNTY OF SAN FRANCISCO.

action. No question as to the eflFect of the bonds as evidence
was before the court And it is plain that if, to recover in the
ejectment, it was essential to establish the validity of the pro-
ceedings leading to the levy of the tax to pay the interest on
the bonds, it must be essential to establish the validity of the
proceedings leading to the issue of the bonds themselves, and,
of course, the suflSciency of the petition upon which the pro-
ceedings were founded, unless such sufficiency is, from the
character of the instruments, and the recitals in them, to be
conclusively presumed. In the ejectment case, a comparison
of the petition with the assessment roll of the previous year
disclosed the fact that a number less than the majority of the
owners in frontage, as shown by the names on the assessment
roll, appeared on the petition. The subsequent proceedings
were, therefore, from this defect, wholly unauthorized. The
essential initiative to t^hem had never been taken;

The question here is, assuming that an action will lie
against the city and county on the coupons, will the suffi-
ciency of the petition be presumed ; or, what will

ACTION OH COU- -^ , *^ ,1 . -ii 1 "I f 1

S?J?~^^S5S amount to the same thmg, will the defendant
cten^Jf^Sw be estopped from denying its sufficiency so as to
'"°"' allow the admission in evidence of the coupons,

without other proof than the production of the bonds to



Online LibraryLawrence LewisAmerican and English corporation cases : a collection of all corporation cases, both private and municipal (excepting railway cases), decided in the courts of last resort in the United States, England, and Canada [1883-1894] → online text (page 62 of 73)