Bates v. Gerber

Works, J. Mandamus to compel the respondent, as treasurer of the city of Sacramento, to pay interest on overdue coupons of certain bonds of said city. The court below sustained the demurrer to the complaint, and rendered judgment for the defendant thereon. The plaintiff appeals. The precise question presented here was decided adversely to the appellant in Davis v. Porter, 66 Cal. 658. On the authority of that case the judgment of the court below must be affirmed, not alone because it has been so decided by this court, but because it was correctly decided, for the reasons stated in the opinion. In this case a demand was made on the treasurer for the payment of the annual interest provided for by the coupons, and interest on the amount due on such coupons from the time the same matured. The treasurer offered to pay the amount called for by the coupons, on delivery of such coupons to him, but declined to pay interest on the interest, or to pay any part of the indebtedness, unless the coupons were surrendered as fully paid and satisfied. It is earnestly contended by the appellant that, conceding that mandamus would not lie to compel the treasurer to pay interest on the annual interest, such coupons drew interest from their maturity under the general statute providing for such interest, after maturity, on all contracts, and that, as the debt existed, the treasurer had no right to impose, as a condition upon which he would pay the annual interest, that the coupons should be surrendered. We cannot accede to this view of the law. These bonds were provided for by special statute, which provided a specific fund out of which they should be paid. The act provided for the payment of the principal and annual interest, and nothing more. (Stats. 1858, p. 279, sec. 85, p. 280.) There was no other fund out of which the interest demanded could have been paid, and to have paid out a part of the fund on a liability not pro [552] vided for or allowed by law would have been to divert a part of the fund from the purpose intended, and thereby to deprive other bond-holders of their annual interest, and perhaps of their principal. The statute having provided specifically what should be paid out of this fund, and of what the fund should consist, it cannot be presumed that it was the intention of the legislature that there should be a general liability over against the city for interest on the annual interest in ¿ase the fund for any year should be insufficient to meet such interest. The statute under and by virtue of which these bonds were issued was the basis of, and became a part of, the contract, and the bond-holders must be held to have taken the bonds.with the understanding and agreement that they were only entitled to the principal and the annual interest, and that if the fund provided for the payment thereof should be insufficient to meet the same, that no interest on the coupons were provided for or could be recovered. Judgment affirmed. McFarland, J., and Paterson, J., concurred.