Johnson v. City of San Diego

Full title: P. L. JOHNSON et al., Respondents, v. THE CITY OF SAN DIEGO, Appellant

Court: Supreme Court of California

Date published: Oct 9, 1895

109 Cal. 468 (Cal. 1895)

42 P. 249

Opinion

Appeal from a judgment of the Superior Court of San Diego County and from an order denying a new trial. E. S. Torrance, Judge.

COUNSEL:

The legislature, where there is no constitutional inhibition, possesses the power to divide counties and towns at their pleasure, and apportion the common property and the common burdens in such manner as to them may seem reasonable and equitable. (Willamantic School Society v. First School Society , 14 Conn. 469; Hampshire County v. Franklin County , 16 Mass. 76; North Hempstead v. Hempstead, 2 Wend. 109; Montpelier v. East Montpelier , 29 Vt. 20; 67 Am. Dec. 748; State ex rel. Waring v. Mayor , 24 Ala. 701; Mayor v. State , 15 Md. 376; 74 Am. Dec. 572; Ashby v. Wellington, 8 Pick. 524; Denton v. Jackson, 2 Johns. Ch. 320.) When part of the territory of a town is detached therefrom and annexed to another town or formed into a new town, the old town remains liable for the debts existing against it at the time such territory was detached, unless the act of the legislature detaching such territory makes some provision by which the debts of the old town, or some portion thereof, shall be charged to the town to which such territory is annexed or to the newly created town. (Depere v. Bellevue , 31 Wis. 120; 11 Am. Rep. 602; Windham v. Portland , 4 Mass. 384; Veazie v. Howland , 47 Me. 127; Morgan v. Beloit City, 7 Wall. 613; Laramie County v. Albany County , 92 U.S. 307; Mount Pleasant v. Beckwith , 100 U.S. 514.) The legislature possesses the power by general law to provide for the change of the boundaries of the city of San Diego and reserve to it the right to levy and collect taxes upon the territory excluded, to pay its portion of indebtedness of the city at the time of exclusion of territory therefrom, and if such reservation was inequitable, it was not in the power of the legislature, without the consent of the city, afterward to remedy the evil. (Town of Milwaukee v. City of Milwaukee , 12 Wis. 103; Hampshire County v. Franklin County, supra .) The passage of the act of March 19, 1889, and the exclusion of Coronado beach from the city thereunder, and the acceptance by the city of Coronado of the provisions of the act, created a contract between the city of San Diego and the city of Coronado, and invested the city of San Diego with the right to levy and collect taxes upon the property of the city of Coronado which the legislature cannot take away by any subsequent legislation without impairing the obligations of a contract. (Bowdoinham v. Richmond , 6 Me. 112; 19 Am. Dec. 197.) The contracts which the legislature are prohibited from impairing are not limited to those between the state and individuals. (Lewis v. Brackenridge, 1 Blackf. 220; 12 Am. Dec. 228.)

William H. Fuller, City Attorney, and Clarence L. Barber, Deputy City Attorney, for Appellant.

Gibson & Titus, and Samuel M. Shortridge, for Respondent.

There is no common-law liability on Coronado beach to pay any part of the bonded indebtedness mentioned; on the contrary, the city of San Diego remains wholly liable for all existing debts under the common law. (Mount Pleasant v. Beckwith , 100 U.S. 514; Laramie County v. Albany County , 92 U.S. 307; Bristol v. New Chester , 3 N.H. 524; Depere v. Bellevue , 31 Wis. 120-25; 11 Am. Rep. 602; 15 Am. & Eng. Ency. of Law, 1023, tit. "Apportionment of Property, Debts, and Liabilities." ) The levying of an assessment pro rata upon the excluded property to pay the bonded indebtedness would be a clear violation of the maxim that "he who takes the benefit must bear the burden." (Broom's Legal Maxims, 706; Civ. Code, sec. 3521; Simson v. Eckstein , 22 Cal. 581.) The legislature has absolute control over municipal corporations, unless restrained by the constitution; and in this state there is no constitutional restraint. (People v. Alameda County , 26 Cal. 642; Laramie County v. Albany County, supra ; Russel v. Reed , 27 Pa. St. 166, 170; 1 Dillon on Municipal Corporations, sec. 65; Carter v. Cambridge etc. Bridge Proprietors , 104 Mass. 236; Luehrman v. Taxing District, 2 Lea, 425; Perry County v. Conway County , 52 Ark. 430; Layton v. New Orleans, 12 La. Ann. 515; Sedgwick County v. Bunker, 16 Kan. 498; Lycoming v. Union , 15 Pa. St. 166; 53 Am. Dec. 575; Guilford v. Supervisors , 13 N.Y. 143; New Orleans v. Clark , 95 U.S. 654; County of Richland v. County of Lawrence , 12 Ill. 1; Dunmore's Appeal , 52 Pa. St. 374; Scituate v. Weymouth , 108 Mass. 128.) The act of the legislature in question did not interfere with vested rights or violate the obligation of contracts. There was no contract and no vested right was acquired. (Scituate v. Weymouth, supra; Cooley on Constitutional Limitations, 4th ed., 232, 233.)

JUDGES: In Bank. Henshaw, J. Harrison, J., Temple, J., Van Fleet, J., Garoutte, J., and Beatty, C. J., concurred.

OPINION

HENSHAW, Judge

Appeals from the judgment and from the order denying a new trial. Under an act of the legislature approved March 19, 1889 (Stats. 1889, p. 356) a portion of the territory formerly embraced within the corporate limits of the city of San Diego was excluded therefrom. The act referred to was in its nature permissive. It provided for the calling of an election upon petition, at which election the qualified electors within the territory proposed to be segregated should vote separately from the other voters of the municipal corporation, and the votes cast in such territory should be canvassed separately from the votes cast by the other electors of the municipality. If a majority of the votes cast in the territory proposed to be excluded and a majority of the votes cast in the municipality proper should both be for the segregation, then, after certain formalities had been complied with, the territory should cease to be a part of the municipal corporation, "provided" (so runs the law),

" That nothing contained in this act shall be held to relieve in any manner whatsoever any part of such territory from any liability for any debt contracted by such municipal corporation prior to such exclusion.

" And provided further, that such municipal corporation is hereby authorized to levy and collect from any territory so excluded, from time to time, such sums of money as shall be found due from it on account of its just proportion of liability for any payment on the principal or interest of such debts; such assessment and collection shall be made in the same manner and at the same time that such assessment and collection is levied and made upon the property of such municipal corporation for any payment on account of such debts.

" And provided further, that any such territory so excluded from any municipal corporation may at any time tender to the legislative body of such municipal corporation the amount for which such territory is liable on account of such debts, and after such tender is made such authority as is herein given municipal corporations to levy and assess taxes on such excluded territory shall cease." Under this law the territory known as the Coronado beach, which contains the land of these plaintiffs, was excluded from the corporate control of the city of San Diego.

At the time of this exclusion the city of San Diego had a bonded indebtedness of four hundred and eighty-four thousand dollars, and after this exclusion the city continued to assess and levy taxes upon the detached territory to meet the requirements of this bonded indebtedness, which taxes these plaintiffs duly paid.

In 1893 the legislature passed an act entitled "An act providing for the adjustment, settlement, and payment of any indebtedness existing against any city or municipal corporation at the time of exclusion of territory therefrom and the division of property thereof." (Stats. 1893, p. 536.)

Plaintiffs availed themselves of the provisions of this act to have the court determine what proportion, if any, of the bonded indebtedness of San Diego was properly chargeable against the excluded territory. The demurrer of the defendant city to their petition was overruled, and the court, after hearing evidence, found the existence of the bonded [42 P. 250] indebtedness; that all of the moneys received by the city and evidenced by this indebtedness had been expended for a sewer system, for the purchase of schoolsites, and the erection of schoolhouses; for refunding a pre-existing debt of the city, and for clearing its titles to certain real estate, and for buying certain rights of way, and that no portion of the money had been expended upon or within the excluded territory. The value of the property belonging to the city at the time of the segregation was found to be six hundred thousand dollars, all of which remained within its boundaries and under its control after the segregation. It was further found that the city of San Diego had never made any improvements in the excluded territory and had never owned any property in it. The ratio of the value of the excluded territory to that of the city immediately preceding the exclusion was as 1 to 14. Under these findings, and in strict accord with the dictates of the statute, the court adjudged that there was nothing due or to become due from the excluded territory to the city.

The chief contention of the defendant, raised upon demurrer, pressed in its motion for a nonsuit and urged against the judgment, may be thus stated: The property owners of the city and the property owners of the excluded territory, when in accordance with the permissive act of the legislature (Stats. 1889, p. 356) they elected to segregate Coronado beach, did so under a contract expressed in the act itself, by which the property owners of the excluded territory were allowed to remove their land from the jurisdiction of the city with the understanding that they should continue to pay their pro rata share of the municipal debts existing at the time of the exclusion; that the rights of the city vested under this contract cannot be destroyed or impaired by subsequent legislation, and that therefore to the parties to this controversy the statute of 1893 has no applicability.

This contention is first met by the respondents with the declaration that the act of 1889 did not impose or mean to impose a pro rata liability upon the excluded territory, but only a liability for a just proportion of the debt, which proportion was a subject of future ascertainment or determination, and much nice argument is advanced in its support. But the language of the proviso that "nothing contained in the act shall be held to relieve in any manner whatsoever, any part of such territory from any liability for any debt contracted by such municipal corporation prior to such exclusion" would seem to be a comprehensive pronunciation that the segregated territory should, after exclusion, be held by the same liabilities as bound it before; and as before its exclusion it was liable for its pro rata share of these debts, it must be that after exclusion it remained subject to the same liabilities.

We think, therefore, that by the only just and reasonable interpretation of which the act in question is susceptible, the legislature, in permitting the division, exercised its undoubted power to adjust the burden of the existing corporate debt, and decreed that the excluded territory should continue to bear its former proportion of that burden.

The question that is left for consideration is that of the power of the legislature to change and readjust the burden of such an indebtedness, after having in the act of separation declared in what manner it should be borne.

Municipal corporations in their public and political aspect are not only creatures of the state, but are parts of the machinery by which the state conducts its governmental affairs. Except, therefore, as restrained by the constitution, the legislature may increase or diminish the powers of such a corporation -- may enlarge or restrict its territorial jurisdiction, or may destroy its corporate existence entirely. Says Cooley: "Restraints on the legislative power of control must be found in the constitution of the state, or they must rest alone in the legislative discretion. If the legislative action in these cases operates injuriously to the municipalities or to individuals, the remedy is not with the courts. The courts have no power to interfere, and the people must be looked to right through the ballot-box all these wrongs." (Cooley on Constitutional Limitations, 6th ed., 229.)

" A city," says Mr. Justice Field, in New Orleans v. Clark , 95 U.S. 644, "is only a political subdivision of the state, made for the convenient administration of the government. It is an instrumentality, with powers more or less enlarged according to the requirements of the public, and which may be increased or repealed at the will of the legislature."

This right of legislative control, arising from the very nature of the creation of such corporations, is established under the well-settled doctrine that such corporations have no vested rights in powers conferred upon them for civil, political, or administrative purposes, or as Dillon states it: "Legislative acts respecting the political and governmental powers of municipal corporations not being in the nature of contracts, the provisions thereof may be changed at pleasure where the constitutional rights of creditors and others are not invaded." (Dillon on Municipal Corporations, 4th ed., sec. 63.)

The act of the legislature in relieving Coronado beach from the corporate control of San Diego, and in adjusting the burden of the city's debt, was undoubtedly the exercise of a proper power directed to the political and governmental affairs of the municipality. That the legislature by the terms of the act segregating the territory had the right to dispose of the common property, and provide the mode and manner of the payment of the common debt, imposing its burden in such proportions as it saw fit, is a proposition undisputed and indisputable. It is equally well- settled law that when the act of segregation is silent as to the common property and common debts, the old corporation retains all the property within its new boundaries, and is charged with [42 P. 251] the payment of all of the debts. Upon these two propositions the cases are both numerous and harmonious. (People v. Alameda County , 26 Cal. 641; Hughes v. Ewing , 93 Cal. 414; Los Angeles County v. Orange County , 97 Cal. 329; Town of Depere v. Town of Bellevue , 31 Wis. 120; 11 Am. Rep. 602; Laramie County v. Albany County , 92 U.S. 307; Lycoming v. Union , 15 Pa. St. 166; 53 Am. Dec. 575; Mount Pleasant v. Beckwith , 100 U.S. 514; Layton v. New Orleans, 12 La. Ann. 515; Beloit v. Morgan, 7 Wall. 619.)

There is authority, however, holding that when the legislature has spoken in the original act, rights vest under it which may not be impaired, and it is upon these cases that appellants rely.

Thus in Bowdoinham v. Richmond , 6 Me. 112, 19 Am. Dec. 197, the supreme court of Maine decided in 1829 that as the act of the legislature dividing the town of Bowdoinham and incorporating a part of it into a new town by the name of Richmond, enacted that the latter should be held to pay its proportion toward the support of all paupers then on expense in Bowdoinham, a later act exonerating the new town from this liability was void. The court held that by the former act a vested right of action arose in favor of the old town against the new, and that the later act in destroying this right impaired the obligation of the contract on the part of Richmond created by the first act. Just how the court reached the conclusion that a contract was created by the first act is not plain, but it seems to have been based somewhat upon the conviction that the assent of the old town was necessary to the segregation.

The opinion, however, looks for authority to the case of Hampshire County v. Franklin County , 16 Mass. 76, decided in 1819. In that case the legislature had created the county of Franklin out of territory formerly a part of the county of Hampshire. The act was silent as to the disposition of the public property and the public debt. By an act passed two years later the legislature provided in effect that if at the time of the segregation there were funds belonging to the county of Hampshire in excess of its debts, the new county should be entitled to such proportion of those funds as the assessed value of the property of the new county bore to the assessed value of the property of the old. The supreme court decided in accordance with the undoubted rule that as the first act was silent upon the subject, all of the common property within its limits belonged to the old county, which was likewise charged with all existing debts. It further held that rights vested under this act, and that the later act providing for an apportionment violated these rights in attempting to give the property of Hampshire to Franklin county; in other words, that the later act created a debt from Hampshire to Franklin county, which before had not existed.

It is to be noticed that in this case the original act was silent as to common property and debts, but as in such case the law steps in and makes disposition of them, the silence was deemed equivalent to an affirmative declaration of the legislature making disposition which could not afterward be modified.

But distinguished as are the courts which have announced this doctrine, their views have not been followed, and the decisions themselves have been elsewhere criticised and rejected, until it may be safely said that it is the general rule that where the original act does not make disposition of the common property and debts the legislature may at any subsequent time by later act apportion them in such manner as seems to be just and equitable.

Under the decisions adopting this rule the theory of vested rights and contractual relations is rejected as being a false quantity in the dealings of the sovereign state with its governmental agents and mandatories. And while it is not denied that the state may make a contract with a municipal corporation, or may permit municipal corporations to enter into binding contracts with each other, which contracts it cannot impair, these contracts must be in their nature private, although the public may derive a common benefit from them, and the contracting cities are as to them measured by the same rules and entitled to the same protection as would a private corporation. The subject of such a contract, however, can never be a matter of municipal polity or of civil or political power, for the legislature itself cannot surrender its supremacy as to these things and thus abandon its prerogatives and strip itself of its inherent and inalienable right of control.

Of the cases so holding, either directly or impliedly, a few may profitably be mentioned.

In County of Richland v. County of Lawrence , 12 Ill. 1, the facts were that the former county had been carved out of the territory of the latter by an act making no disposition of the county property. The state had given to the county of Lawrence a large sum of money, which it held at the time of segregation. By a later act the legislature declared that the new county should be entitled to receive from the old a certain proportion of this fund, which sum the old county refused to pay under the claim of vested right and ownership. The supreme court upheld the act declaring that there was no contract between the state and the old county, which was merely the state's agent. The case of Hampshire County v. Franklin County, supra, is unfavorably reviewed.

In Perry County v. Conway County , 52 Ark. 430, the original act detaching territory made no apportionment of the debt; a later act which did so was attacked as unconstitutional. The supreme court there said: "The earlier doctrine (still followed by some courts) was that the act detaching the territory must apportion the debt, and that it could not be subsequently taken from the old and imposed upon the new county. (Hampshire County v. Franklin County, supra ; Bowdoinham v. Richmond, supra .)

" The better doctrine is that the power of the legislature to impose the debt [42 P. 252] of the one county upon another depending upon the existence of a moral obligation from the new county, or the county receiving new territory, to pay part of the old debt, the legislature may so ordain whenever it finds the moral obligation to exist."

In Dunmore's Appeal , 52 Pa. St. 374, four boroughs were erected in a township which was heavily in debt. By act afterward passed the burden of the debt was to be apportioned by commissioners between the boroughs and the township. The supreme court of Pennsylvania upheld the act.

In Layton v. City of New Orleans, supra, the act of the legislature consolidating several municipalities into one government, known as the city of New Orleans, provided that the debts of each should be liquidated by taxation upon its own inhabitants. Afterward, by another act it was provided that the debts should be paid by taxation uniformly upon all the property of the new city. The court held that the earlier act was not a contract and no rights vested under it, and that, as in these matters the legislature is supreme, it could change its policy and readjust these debts.

In Mayor of Baltimore v. State , 15 Md. 376, 74 Am. Dec. 572, the court say: "The doctrine that there is a fundamental principle of right and justice inherent in the nature and spirit of the social compact that rises above and restrains the power of legislation cannot be applied to the legislature when exercising its sovereignty over public charters granted for the purpose of government."

Says Dillon on Municipal Corporations, fourth edition, section 189: "But upon the division of the old corporation, and the creation of a new corporation out of a part of its inhabitants and territory, or upon the annexation of part of another corporation, the legislature may provide for an equitable apportionment or division of the property and impose upon the new corporation, or upon the people and territory thus disannexed, the obligation to pay an equitable proportion of the corporate debts. The charters and constituent acts of public and municipal corporations are not, as we have before seen, contracts, and they may be changed at the pleasure of the legislature, subject only to the restraints of special constitutional provisions, if any there be. And it is an ordinary exercise of the legislative dominion over such corporations to provide for their enlargement or division, and, incidental to this, to apportion their property and direct the manner in which their debts or liabilities shall be met and by whom. The opinion has been expressed that the partition of the property must be made at the time of the division of or change in the corporation, since otherwise the old corporation becomes, under the rule just above stated, the sole owner of the property, and hence cannot be deprived of it by a subsequent act of the legislature. But, in the absence of special constitutional limitations upon the legislature, this view cannot, perhaps, be maintained, as it is inconsistent with the necessary supremacy of the legislature over all its corporate and unincorporate bodies, divisions, and parts, and with several well-considered adjudications."

To the same general effect are the cases of Laramie County v. Albany County, supra ; Mount Pleasant v. Beckwith, supra ; Scituate v. Weymouth , 108 Mass. 128; Willimantic School Society v. First School Society , 14 Conn. 457; Guilford v. Supervisors , 13 N.Y. 143.

In this state the power of the legislature to make such subsequent adjustments was early declared in People v. Alameda County, supra. Alameda county was created out of the territory of Contra Costa county in 1853. At the time of the separation Contra Costa county owed for a bridge which had been constructed upon the territory set apart to Alameda county. The original act made no provision for the payment of this indebtedness, which thus remained a charge against the old county. By two separate later acts the legislature provided for the apportionment of the debt, putting a part of the burden upon Alameda county. These acts were upheld as a proper exercise of legislative power.

And, indeed, it is not easy to see how the opposite view can be maintained. Since the legislative power, within constitutional limitations, is supreme in the matter; since, in the first apportionment the people affected are entitled to no voice (except through their representatives), and since the act of the legislature is not in the nature of a contract, it cannot logically be held that the power has been exhausted by its first exercise. The right still remains to make such future adjustments as the equities may suggest.

Nor in the operation of the act in question upon the city of San Diego can we perceive any hardship. It had at the time of the segregation six hundred thousand dollars, acquired while Coronado beach was a part of its territory, and partially acquired, doubtless, by taxation upon this land. All of this property it retains. All of the moneys evidenced by the bonded indebtedness were expended within its present territorial limits, and no dollar of it went to improve the excluded territory. Having all of the common property and all of the fruits of the common debt, it is certainly not onerous or oppressive that it should be asked to pay for what has been expended for its exclusive benefit. In a certain sense, it is true that Coronado beach was also benefited by these expenditures. In the same sense San Mateo county is benefited by the public improvements of the city and county of San Francisco, but it has never been asserted that for such benefits a sister county should be called upon to pay.

The judgment and order appealed from are affirmed.