Reis v. State
Reis v. State
Opinion of the Court
This action is founded upon interest coupons detached from bonds issued under the act of May 3, 1852 (Stats. 1852, p. 59). The act is entitled “An act authorizing the treasurer of the state to issue bonds for the payment of the expenses of the Mariposa, Second El Dorado, Utah, Los Angeles, Clear Lake, Klamath and Trinity and Monterey expeditions against the Indians.” The first section of the act reads as follows: “A sum not exceeding six hundred thousand dollars is hereby appropriated and set apart as an additional war fund, payable in ten years, out of any moneys which may be appropriated by Congress to defray the expenses incurred by the state of California, and interest thereon at the rate of seven per cent per annum, in the suppression of Indian hostilities, or out of the proceeds of the sale of any public lands which may be donated or set aside by Congress for that purpose; and should no such appropriation or donation be made, or if an amount sufficient should not be appropriated or donated within the said ten years, then the bonds authorized to be issued by this act shall be good and valid claims against the state, and shall be paid out of any moneys in the treasury not otherwise appropriated, to pay the expenses of the expeditions mentioned in this act.” The bonds issued under this act were in denominations of $100, $250, $500 and $1,000 each, payable in ten years from the date of said act, with interest at the rate of seven per cent per annum, said interest being represented by coupons attached to said bonds, each coupon representing one year’s interest. Said coupons were alike in general language, and differed only in number, amount and date of maturity. The coupons sued upon in this case were coupon No. 2, for $70, detached from bond 33, and coupons No. 3, for $70 each, detached from one hundred and eighty-one bonds, and coupons No. 4, for $70.each, detached from the same bonds, and coupons No. 5, for $46.66 each, detached from a" like number of bonds; amounting, in the aggregate, to the sum of $39,902.12. The claims were presented to and rejected by the state board of examiners in November, 1894. Findings and judgment went for the plaintiff in the court below, except as to coupons No. 3, detached from bonds numbered 3, 10, 11,
Sawyer v. Colgan; supra, was an application for a writ of mandate to compel the controller of the state to issue a warrant upon the state treasury for the amount claimed to be due on a certain bond, and on certain coupons. The bond was issued under the act of 1852, the same as the bonds from which the coupons in this case were detached. Some of the coupons in that case were attached to said bond 420. The other coupons were detached from bonds issued under the same act, and the remainder were detached from other bonds issued under the act of February 15, 1851. In reference to the bonds issued under the act of 1852, this court in that case said: “We think it is clear that the liability of the state upon the bonds thus provided for was conditional. They were conditioned upon the failure of Congress to make an appropriation to pay them. Upon the failure of Congress to do so, and not before, were they to become good and valid claims against the state. They were to be paid within ten years; and if Congress within that time made no appropriation to pay them, they were to be paid out of money in the state treasury not otherwise appropriated. Congress did make an appropriation to pay these bonds” (citing the provisions of the act of Congress of August 5, 1854, supra). “But it is said that subsequent acts of Congress imposed conditions which were not in any way binding on the bondholders, and that, in any event, the condition was not complied with until the funds provided by the act of Congress were paid into the state treasury. Neither of these contentions, we think, is sound.” “The conditions therein provided were not unreasonable, but were merely such precautionary measures against imposition and fraud as Congress had a right to take. The act of May 3, 1852, contemplated action on the part of Congress, and the bondholders must have known when they accepted the bond that, if Congress made an appropriation to pay it, some safeguard would be provided to prevent fraud or imposition.” The court then calls attention to the act of Congress of June 23, 1860, wherein the Secretary of War was authorized to pay out of the unexpended balance of the appropriation on said debt of the state of California, and, answering some of the contentions of the petitioner, says: “It is not sufficient answer to say that this balance was insufficient
We concur: Garoutte, J.; Harrison, J.
Reference
- Full Case Name
- REIS v. STATE
- Status
- Published
- Syllabus
- State—Bonds—Inability—Appropriation.—Act of May S, 1852 (Stats. 1852, p. 59), provided for the issuance of bonds to pay the expense of military expeditions, such bonds to be payable out of funds appropriated for that purpose by Congress, with the condition that, if such appropriation was insufficient, the bonds would be a valid claim against the state. Congress, in 1845 (19 Stat. 576), appropriated an unapportioned amount intended to pay the military expenses of the state incurred under the act of May 3, 1852, and under prior acts, but such appropriation, while sufficient to cover the expense under the act referred to, was insufficient to pay the entire indebtedness for which it was appropriated, and interest coupons on such bonds held by plaintiff were unpaid. Held, that, the liability of the state being conditioned on the failure of Congress to make an appropriation sufficient to pay the bonds issued under that act, such appropriation being sufficient for that purpose, the state was not liable, though the appropriation was insufficient to cover another and prior indebtedness not mentioned in the act.