CITY OF FAIRFIELD v. HUTCHEON (1948)

District Court of Appeal, Third District, California.

CITY OF FAIRFIELD v. HUTCHEON.

Civ. No. 7547.

Decided: September 03, 1948

Goodman & Goodman, of Fairfield, for petitioner. Kenneth I. Jones, of Fairfield, Orrick, Dahlquist, Neff & Herrington, of San Francisco, amici curiae.

The City of Fairfield, a municipal corporation of the sixth class, seeks by mandate to require its clerk to countersign and issue municipal improvement bonds in the aggregate sum of $125,000, which were voted by over two-thirds majority at an election held May 13, 1948, for ‘acquisition, construction or completion’ and repairing of the city water and sewer systems. The clerk refused to countersigned or issue the bonds on the theory that they are invalid because the ordinance, published notices and printed ballots misled the voters by including in the purposes for which the first and second propositions for bonds were submitted to the electors the unauthorized specified purpose of resorting to the bonds to pay for repairing the water and sewer systems. An alternative writ was issued. A general demurrer was filed by the respondent.

The petitioner contends that the statutory authorization to incur municipal indebtedness and issue bonds therefor by ‘the acquisition, construction or completion of any municipal improvement’ (Stats.1901, sec. 2, p. 27, and amendments, 2 Deering's Gen. Laws, p. 1723, Act 5178) necessarily includes the right to incur indebtedness and issue bonds for repairing the water and sewer systems, and that the Validating Act of 1948, Section 8, which became effective April 29, 1948, after the election was held, has the effect of curing the defect and rendering the bonds valid. (Stats.1948, Chap. 35.)

The respondent asserts that Section 2 of the Municipal Improvements Act limits the purposes for which such bonds may be voted and forbids the right of a municipality to incur indebtedness and vote bonds for repairing water and sewer systems, but that such repairs ‘must be paid from the ordinary revenue of the city.’ City of Long Beach v. Boynton, 17 Cal.App. 290, 296, 119 P. 677, 680. The respondent claims that the unlawful inclusion of the right to pay for such repairs renders the election and bonds invalid as to the first and second propositions submitted to the voters and that the validating act may not retroactively authorize the inclusion of an unlawful purpose not contemplated by the statute and that it is in conflict with Article XI, Section 18, of the California Constitution.

The cause was ably argued by respective counsel. By leave of court the law firm of Orrick, Dahlquist, Neff and Herrington, filed an enlightening amici curiae brief in support of the respondent. The only issues are whether the first and second propositions included in the city ordinance, published notices of election and printed ballots rendered the election and bonds invalid, and whether the bonds were nevertheless validated by the subsequent legislative enactment. No other alleged irregularities were urged.

The petition alleges that Fairfield is a municipal corporation organized and existing under the laws of California; that the respondent is the duly elected and acting City Clerk of Fairfield; that, on March 23, 1948, that city passed ordinance number 167, pursuant to a previously adopted resolution, authorizing the creating of municipal indebtedness in the aggregate sum of $125,000, and calling an election in said city for that purpose to be held April 13, 1948, to acquire, replace, extend and repair its water and sewer systems, together with other specified improvements not involved in this proceeding. For those purposes four separate propositions were included in the ordinance, notices of election and printed ballots. The first proposition was to incur a bonded indebtedness of $52,000 for ‘the improvement of its water works and water system by the acquisition of certain land therefor, the repair, replacement and extension of its water mains,’ etc. The second proposition was to incur bonded indebtedness of $23,000 ‘for the object and purpose as follows: The improvement of its sewer system by the repair, reconstruction and extension of its sewer mains,’ etc. The third and fourth propositions to incur indebtedness of $25,000 each were for street improvements and the construction of a bridge and for building a fire house and purchasing fire equipment. The last two propositions are not involved in this mandamus proceeding. At the election which was held April 13, 1948, each proposition was carried by the approval of more than two-thirds of the voting electors. The bonds were thereafter prepared in accordance with said proceedings, but the City Clerk refused to countersign the bonds as required by Section 5 of the Municipal Improvements Act, for the reasons previously stated. This mandamus action was thereupon commenced in this court.

We are of the opinion the first and second propositions for bonded indebtedness are unauthorized and invalid for the reason that each proposition included in the ordinance, published notices and printed forms of ballots the specifically stated purpose of incurring bonded indebtedness to repair the water and sewer systems, in addition to the other stated purposes. City of Long Beach v. Boynton, supra; Board of Supervisors v. Cothran, 84 Cal.App.2d 679, 191 P.2d 506; Municipal Improvements Act, Stats.1901, p. 27, and amendments, 2 Deering's Gen.Laws, p. 1723, Act 5178, secs. 2 and 5. We assume the electors of Fairfield were misled to their detriment by the unauthorized statements in said propositions that the bonded indebtedness was to be applied in part to the payment of the cost of repairing the existing water and sewer systems. The statute does not authorize bonded indebtedness for that purpose. Section 2 of that act confines the purposes to the ‘acquisition, construction or completion of any municipal improvements.’ It specifies those improvements to which it may apply. The authority to create bonded indebtedness for the purpose of repairing public structures or utility systems is not included therein. Section 5 of that act authorizes the issuance of such municipal bonds only ‘in conformity with the provisions of this act.’ The powers of a municipal corporation are confined to the authority conferred upon it by the constitution, the provisions of its charter or enactments of general law. Legault v. Board of Trustees of the City of Roseville, 161 Cal. 197, 118 P. 706, 39 L.R.A.,N.S., 519; Ellis Landing & Dock Co. v. Richmond, 70 Cal.App. 720, 234 P. 336; 1 McQuillin's Mun. Corp., 2d ed., sec. 386, p. 1061; 18 Cal.Jur. 797, sec. 105; 44 C.J. 1107, sec. 4030; 56 C.J. 577, sec. 696; 43 Am.Jur. 300, sec. 38. The purpose, manner of creating and extent of municipal indebtedness are limited by the express authority granted. Zottman v. San Francisco, 20 Cal. 96, 81 Am.Dec. 96; Reams v. Cooley, 171 Cal. 150, 152 P. 293, Ann.Cas.1917A, 1260; Keller v. City of Oakland, 54 Cal.App. 169, 172, 201 P. 618. Fairfield is not a chartered city. It is a city of the sixth class governed by the provisions of the Municipal Corporation Act of 1883, page 93, and amendments, 2 Deering's Gen.Laws, p. 1810, Act 5233, sec. 850 et seq. Neither that act nor the Constitution contains any provision authorizing a municipal corporation to incur bonded indebtedness for the purpose of repairing existing public works.

The Long Beach case, supra, is determinative of the issue as to whether a city may lawfully create bonded indebtedness to pay for repairing existing municipal works. It squarely decides that issue adversely to the petitioner in this case. The only distinction between that case and the present proceeding is that Long Beach was a chartered city, and Fairfield is not, but operates under the general laws. However, the principle involved is applicable to both classes of cities. The City of Long Beach sought to incur bonded indebtedness for the aggregate sum of $125,000. Two propositions were submitted to the electors: First, for ‘the acquisition, construction and completion of certain repairs' on a pier owned by the city, at a cost of $75,000, and, second, for ‘the acquisition, construction and completion of a new pier’, at a cost of $50,000. At an election held for that purpose, the voters approved the first proposition by a majority in excess of two-thirds, but defeated the proposition to construct the new pier by a lack of such two-thirds majority vote. The City Clerk refused to attest the bonds prepared pursuant to the first proposition. On petition for a writ of mandamus to require him to do so, the Appellate Court denied the writ and held that the charter of Long Beach did not authorize that city to incur bonded indebtedness to repair the pier, and that such bonds were therefore void. The court said:

‘* * * Where it is provided that a bonded indebtedness may be created for specified purposes, the permission and authority so given is exclusive of every purpose not expressly so named. The municipality of Long Beach may lawfully issue bonds to obtain funds with which to construct a wharf or pier, but, when such wharf or pier is once constructed, the cost of maintenance thereof and repairs thereon must be paid from the ordinary revenue of the city. * * *’

In the case of Board of Supervisors v. Cothran, supra [84 Cal.App.2d 681, 191 P.2d 508], this court held that bonds in the sum of $800,000 which were voted at an election held in a high school district, for several stated purposes, some of which were valid, but which also included ‘The purchase of a school laboratory farm’, rendered the bonds invalid and void because the last mentioned purpose was not authorized by statute. In that case the writ of mandamus was denied. The court quoted with approval from the text in 56 Corpus Juris at page 577, section 696, as follows:

‘The purposes for which bonds may be issued are generally fixed by statute, and where so fixed bonds may not be issued for any other purpose, nor may bonds be issued to raise funds for matters otherwise provided for by statute, and bonds issued for an unauthorized or improper purpose are void.’

In that case this court also held that the Validating Act of 1947 did not have the effect of legalizing the bonds, and, on the contrary, that since the stated purposes of the bonded indebtedness contained the unauthorized one previously mentioned, the bonds were void.

In the case of School District No. 6, Chase County, v. Robb, 150 Kan. 402, 93 P.2d 905, 906, 124 A.L.R. 879, the Supreme Court of that State held that, under the statutory power of incurring indebtedness for ‘erecting and equipping’ school houses, the district did not have authority to incur a bonded indebtedness for the purpose of repairing school buildings. The court there said:

‘* * * We think that had it been intended by the legislature that a school district be authorized to issue bonds for such purpose, it would have used language clearly indicating that purpose.’

Some statutes specifically provide for authority to acquire school sites, construct, equip and repair school buildings. But the term ‘repairing’ as used in such statutes, has been construed to exclude indebtedness incurred for making ‘ordinary repairs, which merely constitute maintenance’ of the buildings. (See, 124 A.L.R. 883, Note.) That is exactly what the California court held in the Long Beach case, supra. It said such cost of repairs for maintenance ‘must be paid from the ordinary revenue of the city.’

We conclude that the first and second propositions for incurring bonded indebtedness in the present case are invalid and void for the reason that they included among the stated purposes therefor the unauthorized object of using the funds for repairing the existing water and sewer systems.

We are also constrained to hold that the Validating Act of 1948, which became effective as an emergency statute on April 29, 1948, sixteen days after the election in this case, does not have the effect of rendering said bonds valid, even if they had been previously issued. If the legislature had so intended it could have easily amended the Municipal Improvements Act so as to have specifically authorized the incurring of bonded indebtedness to pay for repairing public works. That was not done. The Validating Act of 1948 (Stats.1948, Ch. 35), so far as it is applicable to this case, merely added to Section 8 of the previous Validating Act of 1947 (Stats.1947, Ch. 492, p. 1473, Gen.Laws, Act 8924) certain general language upon which the petitioner relies in support of its assertion that the challenged statement that the bonded indebtedness was to be incurred, in part, to pay for ‘repairs' does not render the bonds invalid or void because that unauthorized purpose could have been supplied by the legislature, and that the bonds are therefore valid and binding. Section 5 of the Validating Act of 1948 provides, as the previous act also did, that:

‘All acts and proceedings heretofore taken by or on behalf of any public body under any law, or under color of any law, for the authorization, issuance, sale, or exchange of bonds of any such public body for any public purpose are hereby confirmed, validated, and declared legally effective. This shall include all acts and proceedings of the governing board of such public body and of any person, public officer, board or agency heretofore done or taken upon the question of the authorization, issuance, sale, or exchange of such bonds.’

Section 8(a) of the 1948 Act reads:

‘This act shall be limited to the correction of defects, irregularities, omissions, and ministerial errors in carrying out statutory provisions which the Legislature originally could have omitted from the law under which such acts or proceedings were taken, provided that this act shall also operate to supply such legislative authorization as may be necessary to validate any such proceedings heretofore taken which the Legislature could have supplied or provided for in the law under which such acts or proceedings were taken.’ (Italics added.)

The foregoing italicised language was added to the 1948 Validating Act. It was not contained in the Act of 1947.

It may not be held that the deliberate inclusion of a stated purpose to create bonded indebtedness to pay for repairing municipal structures or works, which we must assume was intentionally omitted by the Legislature from the Municipal Improvements Act, constituted a mere defect, irregularity, omission or ministerial error. (1 McQuillin's Mun.Corp., 2d ed., p. 1028, sec. 370.) It was an unlawful and material enlargement of the statutory authorization which would tend to mislead the voters to their prejudice. Such a deliberate and unauthorized act, therefore, does not come within the provisions of the first portion of Section 8(a) of the 1948 Validating Act which we have previously quoted without italics. That portion of Section 8, therefore, affords no relief to petitioner in this case. Regarding the principle that we must presume the Legislature intentionally omitted from the Improvements Act the authorization to incur bonded indebtedness to pay for repairs, the text in 1 McQuillin's Municipal Corporations, above cited, states that:

‘Late decisions adhere to the general rule that where the law enumerates specific powers with reference to a named subject, a power not enumerated is presumed to be withheld. This is to say the enumeration of powers operates to exclude such as are not enumerated.’

We do not think the Legislature intended, by the previously italicised portion of Section 8(a) of the Validating Act of 1948, to validate such deliberate and unauthorized purpose to incur bonded indebtedness to pay for repairs which were already provided for by the general tax fund of the city. That language merely states generally that the Validating Act ‘shall also operate to supply such legislative authorization as may be necessary to validate any such proceedings heretofore taken which the Legislature could have supplied or provided for in the law under which such acts or proceedings were taken.’ (Italics added.) Of course the Legislature could have amended the Improvements Act to so provide, but it did not do so. To validate bonded indebtedness for a purpose in conflict with the existing statute would appear to be unconstitutional, an invasion of vested rights and absurd. It would dispense with compliance of essential provisions of statutory law. Article XI, Section 18, of the California Constitution provides the only manner by which a municipality may incur such bonded indebtedness exceeding the revenue of a particular year. That may be done only by approval of two-thirds of the voters at an election. Suppose the bonds were issued without an election, could they, nevertheless, be validated? We think not. On the same principle they may not be validated when issued in conflict with material requirements of existing statutes. This leads us to conclude the legislature did not intend, by the Act of 1948, to attempt to validate municipal bonds issued for a stated purpose in conflict with the provisions of the Improvements Act.

The rule is well established that a validating statute is ordinarily retrospective in character and may be enacted to cure or validate errors or irregularities in legal or administrative proceedings except such as are jurisdictional in effect or violative of existing vested substantive rights. Board of Supervisors v. Cothran, supra; 11 Am.Jur. 1208, sec. 379; 59 C.J. 791, sec. 370; 25 R.C.L. 790, sec. 37. In the Cothran case, supra, in which this court held that a school district had no authority to incur bonded indebtedness for ‘the purchase of a school laboratory farm’, and therefore determined that the bonds for that purpose were invalid, it was said with respect to the Validating Act of 1947:

‘* * * But the purpose being unauthorized, the validating act cannot be said to have been intended to confer authority denied by the existing statute. In People v. Van Nuys Lighting District, 173 Cal. 792, 797, 162 P. 97, 99, Ann.Cas.1918D, 255, where a curative act was relied upon the court said: ‘A curative act or a conclusive evidence clause in a statute is effective to cure all defects resulting from a failure to comply with provisions which are merely directory of the mode of the exercise of the power. But defects and omissions which go to the jurisdiction of the board to act at all, and which make their action absolutely void, cannot be cured in this manner. [Citing authorities.]’'

We assume that the previously stated rule limiting the right to enact validating acts to cure defects which are not jurisdictional or in contravention of vested rights, is applicable to the present case. The unauthorized incurring of bonded indebtedness contrary to law was both jurisdictional and violative of the vested rights of the citizens of Fairfield. They had a vested right to assume that the cost of repairs would be paid from the ordinary revenue of the city, as the court determined in the Long Beach case. The legislative branch of the city had no jurisdiction to incur indebtedness for an unauthorized purpose.

For the foregoing reasons the demurrer is sustained and the writ is denied.

THOMPSON, Justice.

ADAMS, P. J., and PEEK, J., concur.