MUNICIPAL BOND CO v. CITY OF RIVERSIDE ET AL

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District Court of Appeal, Fourth District, California.

MUNICIPAL BOND CO. v. CITY OF RIVERSIDE ET AL.*

Civ. 1427.

Decided: March 19, 1934

George W. Crouch and Roscoe R. Hess, both of Los Angeles, for appellant. Eugene Best, of Riverside, for appellant–respondent City. W. C. Smith and Everett H. Smith, both of Los Angeles, for respondent Maryland Casualty Co. A. Heber Winder, of Riverside, and W. C. Smith, of Los Angeles, for respondent Dunbar. Lawler & Degnan, Freston & Files, James A. McLaughlin, Clarence J. Walker, and John L. Rush, all of Los Angeles, amici curiæ.

This action was instituted by the holder of certain street improvement bonds issued pursuant to the provisions of the Improvement Act of 1911 (chapter 397, Stats. 1911, p. 730) to recover from the city treasurer of the city of Riverside and from the surety on his official bond and from the city of Riverside the sum of $2,758.93, which it was alleged had been paid to said city treasurer by the owners of property upon which assessments had been levied to pay the cost of the street improvements and for which assessments bonds had been issued and which said sum was alleged to have been appropriated by the city treasurer to his own use. The city of Riverside filed its answer denying liability to the plaintiff and a cross–complaint against its codefendants, the city treasurer and the surety on his official bond, seeking on behalf of the owners of bonds to recover from said cross–defendants the sum of $5,607.08, which was alleged to have been paid to said city treasurer by property owners in payment of coupons upon bonds issued as aforesaid and in partial redemption of said bonds and appropriated by said city treasurer to his own use. The city treasurer and the surety on his official bond filed separate answers, both to plaintiff's complaint and to the cross–complaint of the city of Riverside, denying liability respectively to plaintiff and to the city. Upon the conclusion of the trial of the issues framed by the pleadings, the trial court rendered judgment in favor of plaintiff for the amount sought with interest thereon against the city treasurer and denied recovery against the city and the surety on the official bond of the city treasurer and denied recovery to the city of Riverside against the city treasurer and his surety on the city's cross–complaint. From that portion of the judgment which denied recovery from the city of Riverside and from the surety on the official bond of the city treasurer, the plaintiff appealed. The city of Riverside also appealed from that portion of the judgment which denied to said city recovery on its cross–complaint. These appeals are presented on the judgment roll alone.

After the city of Riverside had perfected its appeal as aforesaid, a stipulation dismissing said appeal was entered into between the counsel for the respective parties and was filed with this court, whereupon the court made its order dismissing said appeal.

Thereafter the city of Riverside presented a motion to dismiss the appeal taken by plaintiff from that portion of the judgment denying recovery against the city or to affirm the judgment rendered by the trial court in favor of the city. At the time this motion for dismissal or affirmance came on for hearing the plaintiff moved the court to set aside the order dismissing the appeal of the city of Riverside from that portion of the judgment denying recovery to the city on its cross–complaint from the city treasurer and the surety on his official bond. The appeal of the plaintiff on the merits and the aforesaid motions were submitted to the court for decision.

It is our opinion that the plaintiff's motion to vacate the order of this court dismissing the appeal of the city of Riverside from that portion of the judgment of the trial court which denied recovery to the city of Riverside on its cross–complaint must be granted for the reason that this court had no jurisdiction of the appeal taken by the city of Riverside. The cross–complaint of the city of Riverside alleged that the city treasurer had collected a total amount of $6,813.16, paid to him on account of the principal and interest and penalties on street improvement bonds issued by him in pursuance of the provisions of the Street Improvement Act of 1911, and that of this amount he had misappropriated the sum of $5,607.08, for which he had not accounted to the 1911 improvement bond redemption fund in the city treasury or to the city of Riverside or to the bond owners. Judgment was prayed that the city treasurer and the surety on his official bond be required to pay into the 1911 improvement bond redemption fund of the treasury of the city of Riverside the sum of $5,607.08 “for the benefit of the owners of said bonds.”

It is obvious that the city's cross–complaint directed to the city treasurer and the surety on his official bond sought recovery of the amount alleged to have been misappropriated by the treasurer on the theory that the city was the trustee for the bond owners of moneys paid to the city treasurer on account of street improvement bonds. The cause of action alleged in the city's cross–complaint was therefore purely equitable in character, and the appeal of the city of Riverside from that part of the judgment which denied recovery on its cross–complaint was an appeal in an action in equity of which the Supreme Court has exclusive jurisdiction. Section 4, art. 6, Constitution of California. Since this court had no jurisdiction of the appeal taken by the city of Riverside, it possessed no jurisdiction to order the dismissal of the appeal and its order in this regard must, therefore, be vacated. Furthermore, since the cross–complaint filed in the action by the City of Riverside raised an issue that is purely equitable in character, we entertain the opinion that jurisdiction of the entire cause on appeal is in the Supreme Court.

It is therefore ordered that plaintiff's motion for vacation of the order of this court made on June 10, 1933, dismissing the appeal of the city of Riverside, be granted, and that said order of dismissal be vacated and set aside and that the cause be transferred to the Supreme Court.

JENNINGS, Justice.

We concur: BARNARD, P. J.; MARKS, J.