Appeal from the District Court of the Twelfth Judicial District, City and County of San Francisco.
Holland, the plaintiff in the Court helow, brought this action in the form of money had and received, against the city of San Francisco, to recover back the sum of four thousand and seventy-eight dollars, which he had paid defendant on account of certain real estate he had purchased of her at a public sale, on the twenty-sixth of December, 1853. The answer of defendant set up that the ordinance under which the sale was made had become valid by virtue of an ordinance passed subsequently thereto, appropriating a portion of the proceeds to arise from said sale to city uses, and also averred that at the time of the receipt of plaintiff’s money, the debts and liabilities of the city exceeded the sum of fifty thousand dollars over and above her annual income ; and that plaintiff’s claim had not been created in conformity with her ordinances or charter, and was therefore void.
The case, by consent, was tried before the Court below, without the intervention of a jury, who found the following facts : That in the month of December, 1853, there was passed, by the common council of the city of San Francisco, a certain ordinance, or what what purported to be an ordinance, which was known and designated as Ordinance Ho. 481, which is in the words and figures following, viz.:
Ordinance Ho. 481—To provide for the sale of certain city property.
The People of the City of San Francisco do ordain as follows:
§ 1. That the mayor and joint committee on land-claims of the' city of San Francisco are hereby authorized and required to sell at public auction, after not less than ten days’ advertisement in three of the daily papers, to the highest bidder, at such time and place as they may think advisable, all those pieces and parcels of land and water situated in the city of San Francisco, and described as follows, viz.:
First piece or parcel, bounded on the north by Clay street, on the south by Central Wharf, on the east by the west line of Drumm street, and on the west by Davis street. Second piece or parcel, bounded on the north by Central Wharf, on the south by Sacramento street, on the east by the west line of East street, and on the west by the east line of Drumm street. Fourth piece or parcel, bounded on the north by Central Wharf, on the south by Sacramento street, on the west by the east line of Drumm street, and on the east by the west line of East street, which east and west line of East street shall be continued westwardly and northerly, in its present direction, to its junction with the south line of Clay street.
§ 2. Said pieces of land and water shall be surveyed under the supervision, and as the mayor and joint committee on land-claims may direct.
§ 3. Twenty-five per cent, of the net proceeds of said sale shall be paid on the day óf sale, in cash, or State indebtedness receivable for public dues by the State, which amount shall be paid to the State of California pursuant to the act of the Legislature, approved twenty-sixth day of March, 1850. Fifty per cent, to be paid in sixty days thereafter, in cash, or city warrants that may have been issued on or after May 1, 1851; and the balance of twenty-five per cent., payable in four months from date of sale, in cash, or three per cent, city scrip issued prior to May 1,1851, and which may have not been funded, as provided by an act of the Legislature of this State authorizing the funding of the floating debt of the city of San Francisco, and to provide for the payment of the same.
§ 4. The mayor shall execute, on behalf of the city, a bond to each purchaser at the time of first payment, that when the whole of the purchase-money is paid, the city shall give to the purchaser a deed for the whole lot or lots purchased. And on the payment of the last instalment, then the mayor shall execute a deed to the party lawfully entitled to the same under sale.
§ 5. That the eighth section, title four, chapter four, of an ordinance to revise, codify, and amend the general ordinances of the city of San Francisco, approved November 4, 1852, and all other ordinances, or parts of ordinances, conflicting with this ordinance, be and the same are hereby repealed.
Frank Turk,
President of Board of Assistant Aldermen.
Joseph F. Atwill, President of Board of Aldermen. Approved December 5, 1853.
C. K. Garrison, Mayor.
That at the time of the passage of the aforesaid pretended ordinance, the board of assistant aldermen was composed of seven members, one member having resigned, and his place not having yet been filled. And that this said ordinance received in the board of assistant aldermen four votes only in its favor, to three votes against it. That the said ordinance received the requisite number of votes in the board of aldermen, and was signed by the mayor on the fifth of December, 1853.
That on the twenty-sixth of December, 1853, the common council of said city passed a certain other ordinance, designated as Ordinance No. 493, which said ordinance was duly passed by both boards of the common council, and received the signature of the mayor. And which said last mentioned ordinance is as follows :
Ordinance No. 493—Appropriating one hundred and eighty-five thousand dollars to the Sacramento Central Joint-Stock Clay Street Wharf Companies, and William E. Dennis.
The People of the Gity of San Francisco do ordain as follows:
§ 1. That the sum of one hundred and eighty-five thousand dollars be and is hereby appropriated from the cash proceeds of the second payment for the city property, ordered sold by Ordinance No. 481, to the Sacramento Central Joint-Stock Clay Street Wharf Companies, and William E. Dennis.
§ 2. That the Comptroller be and he is hereby authorized to issue, on the day of sale of the property ordered sold by Ordidinance No. 481, his warrants upon the treasury as follows: For the sum of seventy-five thousand dollars, in favor of the Sacramento Street Wharf Company. For the sum of seventy-five thousand dollars, in favor of the Central Wharf Joint-Stock Company. For the sum of thirty-five thousand dollars, in favor of William E. Dennis. Said warrants shall be payable from the cash proceeds of the second payment for the property ordered sold as aforesaid, or shall be received in payment for any purchases made at said sale, in accordance with the terms of Ordinance Mo. 481.
Frank Turk,
President of Board of Assistant Aldermen.
Joseph F. Atwell, President of Board of Aldermen.
Approved December 26,1853..
C. K. Garrison, Mayor.
That the foregoing ordinance was signed by the mayor about one-half an hour before the sale hereinafter mentioned ) and that on the said twenty-sixth day of December, and after the ordinance had been signed by the mayor, the mayor and the joint committee on land-claims, which committee consisted, besides the mayor, of two members from each board of the common council, and was a standing committee of the common council, proceeded to sell at public auction the land mentioned and described in said Ordinance Mo. 481.
That said sale purported to be a sale by the city of San Francisco of the property mentioned in Ordinance Mo. 481) that it was advertised for ten consecutive days preceding the same in more than three daily newspapers printed and published in the city of San Francisco) that at said sale, there were present the mayor, the committee on land claims, and nearly all the members of both boards of the common council) and that no person whatever protested against or objected to the sale) that the sale was conducted in accordance with the directions of said Ordinance Mo. 481) that the prices were favorable to the city, and that the said property since that time has decreased in value, and at the time of suit brought, was not worth more than one-half of the price brought at said sale) that at said sale, the plaintiff, Mathaniel Holland, bid off lot numbered eighty-nine for the sum of seven thousand nine hundred dollars) that on the twenty-seventh December, 1853, a bond was signed, sealed, and delivered to plaintiff, and accepted by him) said bond being sealed with the seal of said city, and authenticated by the signature of the mayor, which seal was so affixed by the authority and direction of the mayor, which said bond was conditioned for the conveyance of the lot in question, by the city, on payment of the purchase-money) that on the 27th day of December, in the year 1853, the said plaintiff paid to the land committee, and the land committee to the treasurer of the city of San Francisco, the sum of two thousand and seventy-eight dollars; that on the twenty-eighth of February, 1854, the plaintiff paid to the land committee, and the land committee to the treasurer of the city Of San Francisco, the further sum of two thousand dollars) that said money was paid on account of said pretended sale, and was used by the said treasurer in the payment of warrants drawn against the city treasurer; that on the seventh day of April, 1854, the common council passed a joint resolution, designated as Joint Besolution 400, directing, among other things, the committee on land-claims to make to the common council a full report of said sales; and that said committee did accordingly make a report thereof to the common council on the twenty-first of April, 1854; that on the twenty-sixth of March, 1851, the Legislature of the State of California passed an act entitled an act to provide for the disposition of certain property in the State of California, which act is hereby made part of the finding; and tha.t the common council of the city of San Francisco, on the fifth of April, 1853, by ordinance duly passed, accepted the grant contained in said act, and all the conditions therein contained, and directed the payment of twenty-five per cent, of all of the proceeds arising from the sale of the property therein granted (embracing the lot in question) to the State. That there has been paid to the joint committee on land-claims, and also to the treasurer of the city of San Francisco by other purchasers at the said sale of December 26th, 1853, large sums of money and State and city comptroller’s warrants, including warrants issued under Ordinance Bo. 493; and that of the moneys and warrants so paid to the joint committee, a large portion was paid by them to the treasurer of the city; that the plaintiff entered into possession of said lot in the month of March, 1854, and has expended thereon the sum of three thousand dollars in improvements, and is now in possession thereof, and has received forty-seven dollars rent thereon; that at the time of the said several payments in warrants, or otherwise, made by the plaintiff on account of said sales, the city of San Francisco was indebted-in the sum of fifty thousand dollars and upwards, over the annual revenue of the city, excluding from such indebtedness the interest thereon existing on the fifteenth day of April, 1851; that of the proceeds of said sales, there was paid to the State fifty thousand dollars in State indebtedness, receivable for public dues by the State, by the land committee, being twenty-five per cent, of the proceeds of said sales which had been paid at that time; and that sixty thousand dollars of such indebtedness was attached in a suit against the city, in the hands of D. S. Turner, then treasurer of the city, in whose hands the said last-mentioned warrants still remain.
The Court rendered judgment in favor of plaintiff and against the city, for the full amount claimed. Defendant moved for a new trial, which being denied, this appeal was taken.
Syllabus
Where the charter of a corporation points out a particular mode of conveying its property, it can only be conveyed in the mode prescribed.
Municipal corporations are compound beings. They exercise governmental powers, and also possess the capacity to receive and dispose of their property, like private individuals. In the former capacity, the exercise of its delegated discretion cannot be controlled by the judiciary, but in the latter, its acts are subject to judicial control.
A corporation acting in the disposal of its property, under a full knowledge of the facts, cannot plead ignorance of the law, and its contract being binding on it, is also binding upon the parties purchasing.
Where an ordinance for the sale of city property was passed without the majority required by the charter, and before the sale, another ordinance was legally passed, appropriating a portion of the proceeds to arise from the sale: Held, that the second ordinance was a sufficient recognition of the first to render the sale valid and binding on all parties.
Ordinances for the sale of property of a municipal corporation, are subject to the rules of interpretation applicable to the written instruments of individuals, and not to those by which laws are construed.
Per Murray, (7. dissenting.—An ordinance appropriating the proceeds of a sale to
take place by virtue of a former supposed ordinance, cannot be construed so as to remedy the defects of the first ordinance.
In cases involving questions of confirmation, a party is not necessarily presumed to know the law. This is a fact to be established, and even admitting the presumption to arise, it is not conclusive as against facts which go to establish ignorance of the law.
The charter of the city of San Francisco gives her the power to convey her property by law; and if an ordinance for this purpose is a law, it must be governed by the same rules of construction as other laws.
The city of San Francisco, in the sale of beach and water-lot properly, acted in the capacity of a trustee of the State, under a delegated statutory power, which must be strictly pursued.
The prohibition against contracting debts over a certain amount, contained in the charter, applies to contracts and appropriations, but does not affect liabilities which the law may cast upon the city.
delivered the opinion of the Court—Terry, J., concurring.
This case was decided at the last October Term, and a rehearing had at the present term. The great importance of the question involved, the large interest to be affected, and the researches of the eminent counsel employed on both sides of the case, have thrown upon the Court a great amount of labor, and greater resposibility. I have given the case the most patient examination my other duties would permit.
The first question naturally presented by the record, and the briefs in the case, is, whether the city of San Francisco, under the provisions of her charter, can make a valid sale of her real estate, without the passage of an ordinance authorizing the sale ?
The thirteenth section of article forty-one, page three, of the charter of the city, passed April 15th, 1851, provides, among other things, that the common council “ shall have power within the city to pass all proper and necessary laws for the regulation, improvement, and sale, of the city property.”
The learned counsel for the city insists, that while the charter 375 does point out a particular mode in which a given power may be exercised, it does not prescribe it as the sole mode; and that the power of sale being inherent in the very nature of the corporation, and being also given by the charter, the city is not precluded from exercising the power in other appropriate modes.
But in reference to this particular point, the authorities, as well as the reason of the case, seem clearly against it. In the case of Head and Amory v. The Providence Insurance Co., (2 Crunch, 166,) it is laid down as a general rule “ that a corporation can only act in the manner prescribed by law.” So in the case of the Farmers’ Loan and Trust Company v. Carroll, (5 Barbour S. C. R., 615,) it is substantially held that “ when a corporation relies upon a grant of power from the Legislature for authority to do an act, it is as much restricted to the mode prescribed by the statute for its exercise as to the thing allowed to be done.” If the charter confers upon the corporation a given power, and at the same time prescribes the mode of its exercise, the provisions must be held as dependent, and must be construed accordingly. This view seems to be fully sustained by the former decisions of this Court. 4 Cal. R., 146; 5 Cal. R., 169.
If the position that the city could only sell her real estate by virtue of an ordinance passed for that purpose, be correct, the question then arises, what ordinances were passed by the common council authorizing the sale of property to plaintiff.
An ordinance designated as Ho. 481, “ to provide for the sale of certain city property,” passed the board of aldermen by the requisite majority, and upon the vote in the board of assistant aldermen, there were four votes in the affirmative and three in the negative. The latter board consisted of eight members, and there was, at the time, one vacancy. As the four votes in the affirmative did not constitute a majority of all the members elected, this Court decided, in the case of The City of San Francisco v. Hazen, 5 Cal. R., 169, that the ordinance was not passed. The ordinance was approved by the mayor on the fifth of December, 1853. This rejected ordinance provided, “ that the mayor and joint committee on land-claims should sell, at public auction, certain city property” described therein, among which was the property purchased by the plaintiff. The mayor and land committee proceeded to advertise a sale of the property at auction, as prescribed by the supposed ordinance. The sale was had on the twenty-sixth day of December, 1853. Some half an hour before the sale took place, the common council regularly passed an ordinance, which was properly approved by the mayor, and designated Ordinance Ho. 493, “ appropriating one hundred and eighty-five thousand dollars from the cash proceeds of the second payment for the city property, ordered sold by ordinance numbered four hundred and eighty-one.” By the second section, it was provided, “ that the comptroller be authorized to issue, on the 376 day of salé of the property ordered sold by ordinance numbered four hundred and eighty-one, his warrants upon the treasury.” “ Said warrants shall be payable from the cash proceeds of the second payment for the property ordered sold as aforesaid, or shall be received in payment for any purchases made at said sale in accordance with the terms of Ordinance 481.”
The first important inquiry regards the rules of construction justly applicable to this Ordinance No. 493.
In the case of Bailey v. -The Mayor and Corporation of Hew York, Helson, O. J., speaking of the distinction between the powers of a municipal corporation, as the owner of property, and as a subordinate government, says: “ But the distinction is quite clear and well settled, and the process of separation practicable. To this end, regard should be had, not so much to the nature and character of the various powers conferred, as to the object and purpose of the Legislature in conferring them. If granted for public purposes exclusively, they belong to the corporate body in its public, political, or municipal character. But if the grant was for purposes of private advantage and emolument, though the public may derive a common benefit therefrom, the corporation, quoad hoc, is to be regarded as a private company. It stands on the same footing as would any individual or body of persons upon whom the special franchises had been conferred.” 3 Hill, 539, and authorities there cited.
So in the case of Lloyd v. The Mayor and Corporation of Hew York, 1 Selden, 374, it was held by the Court of Appeals, in 1851, that “the corporation of the city of Hew York possesses two kinds of powers—one governmental and public, and to the extent they are held and exercised, it is clothed with sovereignty; the other private, and to the extent they are held and exercised, is a legal individual. The former are given and used for public purposes, the latter for private purposes.” And in the case of Milhan v. Sharp, 15 Barbour, 210, Edwards, C. J., held that the city of Hew York, so “ far as it acts in the exercise of its public political powers, and within the limits of its charter, is vested with ■the largest discretion; and whether its laws are wise or unwise, whether they are passed from good or bad motives, it is not the province of this Court to inquire. But as regards the acts of the corporation in reference to its private property, it stands upon a very different footing. Such property is held for the common benefit of all the corporators.” “ The mere fact that the forms of legislation are used, will make -no difference in the character of the act. It will be, in no sense, the exercise of a political power delegated for public purposes.” It was also held, in that case, that when a municipal corporation acts in reference to its private property, its acts are equally of a private character, and equally subject to judicial control with the acts of a private corporation. 377 A municipal corporation, from the nature of the effds intend,ed to be accomplished by its creation, is a compound being, acting •. in different capacities. A private corporation—as, for example, a bank—acts directly only upon its own agents, and for its own-private business purposes. A municipal corporation exercises powers of government over others, not its agents. It can pass laws affecting the liberty and property of others, and compel obedience by the infliction of penalties. But in addition to this governmental power, it also possesses the capacity to own and dispose of property like an individual, and, like a private corporation, may be a trustee for others. When acting in the capacity of a limited government, and within the limits of its charter, the exercise of its delegated discretion cannot be controlled by the judicial department. But when acting as a trustee, either for the corporation, or for others, or for both, its acts are subject to judicial control. In the latter case its discretion must be exercised soundly, like the discretion of any other trustee.
And this distinction is not affected by the fact that by the law of its creation a municipal corporation can only act through its common council in the form of an ordinance. Eor is it affected by the fact that ordinances “ for the regulation, improvement, and sale of city property/' are called “laws” by the-charter of the city of San Francisco. Whatever name the Legislature may give such ordinances, does not change the nature of the ordinances themselves. Acts of Congress respecting the property of the United States, are properly called by the Constitution “ rules and regulations.”
The legitimate result of this distinction between the governmental and private capacity of a municipal corporation regards : 1. The right ■ and extent of judicial control. 2. The power to pass retrospective ordinances, and to make binding admissions. 3. The rules of construction applicable to ordinances.
As no judicial control is invoked in this case, it will only be necessary to inquire how far this distinction will affect the decision of this case under the second and third aspects, as above stated. By the act of March 26th, 1851, the State granted to the city of San Francisco, for the term of ninety-nine years, the use and occupation of the beach and water-lots, the State reserving twenty-five per cent, of all moneys arising from the sale or other disposition of the property. The lot purchased by the plaintiff was a part of this property. ' As the owner or trustee of this property, the city could do any act that a private corporation could with respect to its own property, consistent with the rights of the State, and of individuals, after they attached; provided, the forms prescribed by the charter were properly pursued. From this it follows that the common council, in the form of an ordinance properly passed, could adopt any precedent act or acts of the city officers, not prejudicial to the existing 378 rights of the State or of individuals. So, also, it follows, that the city, in the proper form, could make the same binding admissions, not prejudicial to the rights of others, that individuals could make. And hence it also follows, that an ordinance in reference to such a matter is not subject to those rules of interpretation properly applicable to laws, as such, but is subject to the same rules of interpretation as the written instruments of individuals.
If these views be correct, the Ordinance 481 .was, in substance, a power of attorney, well drawn, but defectively executed. If it stood alone, any sale made under it would be void. It then becomes necessary to inquire how far Ordinance 493 adopted and sanctioned Ordinance 481; and to ascertain this, we must inquire as to what knowledge the council had in respect to the facts regarding the supposed passage and provisions of 481.
As to the provisions of 481, the council had full knowledge, as is shown by the provisions of 493 itself; and as to the facts regarding the passage of 481, the council had full means of information, and must be bound to know. The second section of the third article of the charter requires each board to keep a journal of its own proceedings, and upon the final passage of every ordinance the ayes and noes shall be taken and entered upon the journal. The council was bound to know the contents of its own journals, as it had the means of knowing, and it was its duty to know. As the organ of the city, in the disposition of city property, the council was bound to know whatever had been done, or not done, by it, in reference to that property. In the case of Alvarez v Brannan, we held that an individual was bound to remember his own acts. If he failed to do so, the misfortune or negligence was his own, as well as the consequences. So it is with a municipal corporation in its capacity as the owner of property. ■ If the act of the council be unjust in itself, then it will be controlled by the Courts, whether founded upon mistake or not. But if the act be beneficial, though predicated upon a mistake of facts (when knowledge is incumbent), it is still as binding as if actual knowledge existed. It would seem, however, that the only mistake, if any, which was made by the council, was one of law and not of fact. That the council, in passing 493, acted under the mistaken idea that a vote of four members in the board of assistant aldermen was sufficient to pass 481, may be true, and certainly is very probable. But will a municipal corporation, acting under a full knowledge of all the facts, and doing that which in itself is beneficial to its interests as the owner of property, and not at the time inconsistent with the rights of others, be allowed to plead ignorance of the law ? And if the corporation could not make this plea, then the party purchasing it could not make it. I cannot understand the practical reason 379 upon which such a plea could be sustained. The law rewards the diligent and punishes the negligent. If such a ground could be admitted, it would lead a Court into a boundless field of inquiry. The plain, simple, and practical rule, is to require parties to know the law, except in some special cases, when fraud is practiced upon helpless ignorance.
From these views, it follows that the common council had the power to adopt 481, and to give it a retrospective operation, thus recognizing and sanctioning all that had been done up to that time under it, and all that should hereafter be done in pursuance of its terms. Had the council, in the exercise of its governmental powers, passed a retrospective ordinance, it might have been a very different matter. But as the Ordinance 481 only related to the disposition of the city property, and 493 related to the same matter, there could properly be no objection to such action. Ho rights of individuals had then attached so as to be
affected, and this action was no injury to the State, or to the corporators of the city. Whatever an individual could do in the mode appropriate to him, the corporation could do in the mode appropriate to it. Suppose A to make a well drawn power of attorney to B, but there should be a defective execution of the power; and suppose, by another instrument of equal solemnity, duly executed, A should expressly admit the power of attorney to be his act, and predicate the second instrument upon the ground of the validity of the power; and suppose, after this, B should act under the power, would not that action be fully binding upon A, as well as upon the person with whom B dealt as A’s attorney ? I can see no principle of reason or law that would deny the validity of the act of the attorney.
If, then, the common council must be held to have acted with a full knowledge of all the facts and of the law, and with the right and power to adopt 481, and all the precedent acts done under it, was the Ordinance of 493 a sufficient recognition and adoption of 481, to render the subsequent sale of the city property valid and binding upon all parties ? I think it was. The language of 493 is as strong a recognition of 481 as could well be made, not to be in the form of a re-enactment. It expressly assumes the validity of 481, as an ordinance, refers to the sale to be made under it, sets apart a large portion of the proceeds, and makes the warrants issued receivable in payment of purchases made at the sale. In short, the practical vitality of 493 is made to depend upon the expressly recognized validity of 481. Without assuming the validity of 481, there was no basis for 493 to rest upon. The intention to recognize and act upon 481, as a power to sell the city property, is apparent upon the face of Ordinance 493. And the fact that 493 was passed before the sale, and in reference to it, as appears from its provisions, is, in my view, a very strong circumstance to show the intention of the 380 council. Had the ordinance been passed after the sale, and after the money had come into the city treasury, it would not afford the same index to the intention in passing it. In the case of Phelan v. The County of San Francisco, (6 California Reports, 531,) this Court held that taking care of property, already found in the possession of the county, did not make the county liable. And this Court also said in the same case, that the last and only evidence of the acts and intentions of the board of supervisors is to be drawn from the record of its proceedings. The same rule will apply to the ordinances of the common council, and from them, taken in connection with the rules of law applicable to such cases, I have been led to the conclusion that the sale of the city property, made on the day advertised, was valid and binding upon all the parties.
It may seem that this opinion is in conflict with the decision of this Court in the case of The City of San Francisco v. Hazen, 5 Cal. Rep., 169, but such is not the case. On the contrary, they are in no conflict whatever. That and the present case constitute a very apt illustration of a state of case not uncommon in Courts of last resort. We can only decide upon the case brought before us; and if parties neglect to bring up all the facts, we cannot supply them. In the case of Hazen, the ordinance of 493 was not before the Court, and is not alluded to either in the argument of counsel or in the opinion of the Court. The whole decision in that case turned upon the validity of 481, standing alone by itself.
It is unnecessary to decide the other important points made in the case, as those determined dispose of the whole matter.
For the reasons given, the judgment of the Court below should be reversed, and the case of plaintiff dismissed.
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