City of Walnut Creek v. Silveira

• Court: United States State Supreme Court (California)
• Writing for the Court: CARTER; GIBSON
• Citation: 47 Cal.2d 804,306 P.2d 453
• Parties: CITY OF WALNUT CREEK, a Municipal Corporation, Petitioner, v. Edward J. SILVEIRA, City Treasurer of the City of Walnut Creek, Respondent. S. F. 19671.
• Decision Date: 01 February 1957

Page 453

306 P.2d 453 47 Cal.2d 804 CITY OF WALNUT CREEK, a Municipal Corporation, Petitioner,
v.
Edward J. SILVEIRA, City Treasurer of the City of Walnut Creek, Respondent. S. F. 19671. Supreme Court of California, In Bank. Feb. 1, 1957.

[47 Cal.2d 807] John A. Nejedly, City Atty., Walnut Creek, Kirkbride, Wilson, Harzfeld & Wallace, Charles J. Williams, San Mateo, Clark

Page 454

A. Barrett, San Francisco, Kenneth I. Jones, Jr., Arthur J. Harzfeld and Ernest A. Wilson, San Mateo, for petitioner.

Richard M. Ramsey, Richard B. Maxwell and F. L. Manker, Santa Rosa, for respondent.

CARTER, Justice.

By this proceeding in mandamus the petitioner, city of Walnut Creek, seeks to compel the city treasurer to issue certain bonds. The bonds were authorized to be issued pursuant to the Limited Obligation Bond Law of 1955, Stats.1955, ch. 1847, Government Code, §§ 43648-43702. Mandamus is an appropriate remedy to compel respondent treasurer to sign the bonds if the proposed issue meets the requirements of the law since the acts demanded are ministerial duties. City of Oxnard v. Dale, 45 Cal.2d 729, 731, 290 P.2d 859.

The act here involved is applicable only to cities with a population of 4,000 or less, which population is not more than one-seventh of the total population of the city and the unincorporated urban area within a radius of three miles of its limits. Section 6 of Article XI of the state Constitution provides that 'Corporations for municipal purposes shall not be created by special laws; but the Legislature shall, by general laws, provide for the incorporation, organization, and classification, in proportion to population, of cities and towns, which laws may be altered, amended, or repealed * * *.' ¹ The [47 Cal.2d 808] primary question presented here is whether the act here involved is a valid general law within the constitutional meaning or invalid special legislation.

The city of Walnut Creek is a 'general law city', Gov.Code, § 34102. The 1949 merged version of the Classification Act and Municipal Corporation Bill was repealed in 1955, Stats.1955, ch. 624, p. 1120, and the Legislature established 'chartered cities' and 'general law cities.' (See, Gov.Code, § 34100 et seq.) Pursuant to the Limited Obligation Bond Law, the city of Walnust Creek, after notice duly given, and a hearing, determined that the population formula was met and adopted a resolution in accordance with its findings, Gov.Code, §§ 43648, ² 43649. Thereafter, at a regular meeting, the city council, by a two-thirds vote, passed and adopted a resolution that the public interest and necessity demanded the acquisition construction and completion of certain municipal improvements and provided for a municipal bond election. At a subsequent meeting an ordinance was adopted which called for a special election in the city of Walnut Creek to submit to the electors of the city a proposition for incurring a bonded indebtedness to cover the cost of said improvements. Notice was duly given. At a subsequent meeting, one section of the ordinance was amended and notice duly given thereof. The election was duly and regularly called and held in the manner provided by law; two-thirds of the votes cast at the election were in favor of, and authorized the issuance of the limited obligation bonds. ³

The Limited Obligation Bond Law of 1955 defines limited obligation bonds as bonds which are to be paid solely from sales and use taxes imposed and to be imposed and collected by the city, § 43650. The law also provides that the bonds shall state that they are to be paid only from such revenues, §§ 43651, 43654; that the term of the bonds shall not exceed 31 years and that 'The outstanding bonds shall not at any one time exceed an amount for which the average installments of principal and interest

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will exceed 66 2/3 percent of the net revenues to be derived from the imposition of sales taxes at the rate established at the time of calling the election at which the proposition of authorizing their issuance is submitted, as [47 Cal.2d 809] determined by an independent audit and report made by a certified public accountant.' § 43654.1. The general credit, or taxing power, of the city is not liable for the payment of the bonds or interest thereon; only the revenues derived from the sales and use tax are liable therefor, § 43663.

The city sold the bonds on August 14, 1956, at such a price that the average annual installments of principal and interest on the total proposed bond issue of $2,000,000 will not exceed 66 2/3 per cent of the net revenues to be derived from sales taxes imposed at the rate of 1 per cent which was the rate established at the time of the adoption of the ordinance calling the election at which the issuance of the bonds was authorized. The respondent, city treasurer, refused to issue the bonds and this proceeding followed. This was in accord with the statutory provision. ⁴

Limited Obligation Bond Law as a valid general law with respect to classification: It should be noted, preliminarily, that two principles concerning population classification and legislation based thereon have been established in this state, see, Rauer v. Williams, 118 Cal. 401, 50 P. 691; Ex parte Jackson, 143 Cal. 564, 569, 570, 77 P. 457: (1) That there must be a reasonable basis for such classification with respect to the subject matter of the legislation; and (2) that the legislation must relate to a municipal affair.

(1) Reasonable basis rule: In Darcy v. Mayor, etc., of San Jose, 104 Cal. 642, 645, 646, 38 P. 500, 501, it was said that 'Legislatures and courts are not at liberty to disregard a policy so plainly manifested in the fundamental law. But, while the sovereign will is thus plainly expressed in the fundamental law, the rule must not receive an interpretation too absolute. It will not be presumed that it was intended to deprive the legislature of all power to adapt its laws to the varying conditions of its...