at any time after 5 years was never submitted "The proposition to make the bonds payable to the voters; hence was never adopted by them; bonds issued must conform to the propo said bonds. It is not disputed that the above | change affecting the rights of the taxpayers. provision in said act amounts to the granting The court also held thatof permission to municipalities to dispose of their remaining unsold bonds at a price be low their par value; but the contention of the respondents is that the Legislature, having originally had power to impose up-sition adopted by the electors." on municipalities the aforesaid restriction against the sale of their bonds below par, had power through the passage of said act to remove said inhibition and relieve municipalities from the burden thereof. The respondents present this contention in several different forms. They argue, first, that by the terms of the charter of the city of Los Angeles, above quoted, it is provided that But aside from the inaptitude of these citations we do not accept the construction of the Los Angeles charter provision for which the respondents contend, since to do so to the extent claimed would be to sanction an entire subversion of the will of the electors as to practically all of the conditions upon which their consent to the incurring of the indebtedness and the issuance and disposition of the bonds had been obtained through the simple expediency of a legislative enactment. For reasons hereafter to be given, such an "In the procedure for the creation of such bonded indebtedness and for the issuance of such bonds, the general laws of the state of California in force at the time such proceedings are taken shall, so far as applicable, be observ-interpretation of the charter provision should ed and followed." The construction which the respondents would have us place upon this provision of the charter is that whatever changes the Legislature might make in the general laws with relation to the bond issues of municipalities up to the time of the actual issuance and sale of such bonds would be controlling as to the issuance and sale of such bonds after the passage of the later enactment. The respondents cite in support of this phase of their contention the case of Fritz v. San Francisco, 132 Cal. 373, 64 Pac. 556. This case does not sustain the respondents' contention in that regard, but rather leans in the other direction, since it is therein decided that when the general law under which proceedings for the issuance of certain bonds had been initiated in the city of San Francisco was entirely superseded by the adoption of the charter of said city, which provided its own complete scheme for the issuance of municipal bonds, the bonds formerly voted for under the general law could not be issued under the provisions of the charter. We are also referred to the cases of Brownell v. Town of Greenwich, 114 N. Y. 518, 22 N. E. 24, 4 L. R. A. 685, and Morgan v. Falls City, 103 Neb. 795, 174 N. W. 421, as sustaining the respondents' contention. But in the first of these cases it was merely held that a subsequent Legislature might correct irregularities in the action of officials conducting a bond election which did not affect the consent of the taxpayers previously given; while in the latter case it was expressly held that an attempted statutory change in the terms of the bonds voted for under a prior law, providing that they should become due in 40 years, but be payable at any time after 10 years, which change would make such bonds fall due in 20 years and payable at any time after 5 years, could not be permitted, the court holding that this was a substantial not be adopted. The respondent further urges in support of its main contention in this regard that since the Legislature in adopting the statute of 1901 might have omitted the requirement as to the sale of bonds to be voted and issued thereunder for not less than their par value, a subsequent Legislature would have power to relax or remove this restriction at any time; and we are cited to the case of Cole v. City of Los Angeles, 180 Cal. 617, 182 Pac. 436, as sustaining this view. In the above cited case the question was whether or not the statement in the ordinance calling the election that "the maximum rate of interest to be paid on said indebtedness shall be six per cent. per annum payable semiannually" complied with the statute which required the ordinance calling the election to state "the rate of interest to be paid on the indebtedness." It was held that such variance could be cured by statute. There the electorate were fully advised as to the maximum indebtedness to be incurred and voted for such maximum, and no constitutional question was involved. [4] The respondents finally urge that a subsequent Legislature would have power to change this requirement in the earlier statute under which these bonds were voted, for the reason that the electors, in voting to approve the creation of the indebtedness and issue and sale of the bonds in the form and upon the terms specified in such statute, did so with the knowledge that the terms of such statute were subject to legislative change, and therefore gave their approval of these bond issues with the understanding that such changes might be made. This argument is nothing more nor less than a seductive sophistry, since to give it the application for which the respondents contend would be to render every substantial statutory or contractual right of individuals subject to be (203 P.) The as any other provisions in it, since it goes directly to the matter of the relative amount of the burden and benefit which the electors are to agree by their votes to assume. proposition having thus been made by the officials of a city to the voters thereof to approve a bonded indebtedness for the specified purposes in the specific amount of principal, at the specified rates of interest and upon the express assurance that the bond issues, if approved, should not be sold for less than their par value, what relation is created as between the city, through its officials on the one hand, and the electors on the other, by the latter's formal acceptance of such proposition through the required vote? In some jurisdictions it has been held that the relation thus created is a contractual one, which cannot be changed in any essential particular by the officials of the city, either with or without the aid of later legislation. In the case of Merchants', etc., Bank v. Escondido Irrigation District, 144 Cal. 329, 77 Pac. 937, which involved the question as to whether the board of directors of an irrigation district, after the property owners forming the district had voted to issue bonds for the purpose of carrying out the object of its formation, under an act declaring how said bonds should be paid, could be permitted by a later and amendatory act to provide a different method of payment of the indebtedness secured by said bonds, this court said: taken away for no better reason than that they had acted or contracted in view of possible changes in the law. There is one comprehensive answer to each and all of the foregoing arguments of the respondents in support of the general proposition that the act of the Legislature of 1921 has been effectual to remove the requirement of the act of 1901, that these bonds should be voted for and issued upon condition that they should not be sold for less than their par value. It is this: The Constitution, by virtue of the section above quoted, gives to the electors of a municipality the substantial right to grant or refuse their approval to the incurring of any indebtedness beyond the limit expressed in said constitutional provision. The act of the Legislature of 1901, in giving effect to this provision of the Constitution by providing the procedure in conformity with which the electors' approval or disapproval of a proposed bonded indebtedness was to be expressed, has provided the particular terms and conditions upon which the approval of the electors might be secured. Among these were the requirements that the ordinances calling the election should recite the objects and purposes for which the indebtedness was proposed to be incurred, the estimated cost of the public improvement to which the funds secured were to be applied, the amount of the principal of the indebtedness, the rate of interest to be paid thereon. These recitals must be set forth in the ordinances providing for and calling the election, but, in addition "The act providing for the organization of the to these, there is the added provision that der the provisions of the act by the vote of its district, and the organization of the district unthe bonds when issued should be sold "for electors, cannot be otherwise regarded than as not less than their par value." This provi- a contract between the state and the individsion in the act has a two-fold purpose: First, uals whose property was thereby affected. The to assure the electors that the entire sum for contract, indeed, lacks one of the ordinary elewhich they vote to burden themselves and ments of contracts-namely, the actual consent their city with a bond issue will be realized of the statute the majority of the electors were of all the parties to it; but by the provisions from the sale of the bonds; second, to as- empowered to act and consent for the individual sure the electors that the objects and pur- proprietor; and unless this were a legitimate poses for which the bonded indebtedness is exercise of the powers of the state, the statute to be incurred shall be fully subserved itself would be invalid. Hence the consent of through the application of the whole face all the parties to the contract was in fact givvalue of the bonds to such objects and pur-agents; and there was thus created a comen either personally or by their authorized poses. This thought is well expressed in the plete contract between the parties by the terms case of Uhler v. City of Olympia, 87 Wash. 1, of which the property owners in the district 151 Pac. 117, where the court, in dealing with consented to the burden imposed upon their an attempted payment of commissions and property by the provisions of section 17 of the compensation for selling certain municipal original act, and to no other. The burden thus bonds, aptly said: imposed was, that the bonds issued under the act should be paid by revenue derived from an annual assessment upon the real property of the district,' and that their lands should 'be and remain liable' for such assessment; and this implied that this should be the extent of the burden. But by the amendatory act the board of directors is authorized, without the consent, or even the knowledge, of the landowners, to pledge or hypothecate the property acquired by their contributions-that is to say, acquired with their money-and thus to sub "This limitation on the power of the council is just as prohibitive, and, if disobeyed would result in the same evil, as if the statute had provided that the bonds should be sold at not less than par. In either case the object of the law is to prevent speculation in municipal securities, and to insure to those who must ultimately pay the bonds, a dollar in lawful currency for every dollar of obligations issued." In these aspects this stipulation in the stat-ject them to the liability of losing entirely the ute providing for the bond election is as vital property thus acquired; which is not only their property, but by the express provision of the statute (section 13) has been 'dedicated and set apart to the uses and purposes set forth in the original act;' which would leave them only the liability for continued assessments until the balance of the bonds shall be paid. We have no doubt, therefore, that in this respect also the Legislature went beyond its constitutional powers." [not be sold below their face value, it is then beyond the power of the Legislature to authorize a higher rate of interest thereon or a sale of these bonds below par." In the case of Skinner v. City of Santa Rosa, 107 Cal. 464, 40 Pac. 742, 29 L. R. A. 512, which was a case wherein the officials of the city of Santa Rosa had undertaken to change the amount of interest to be paid upon certain municipal bonds of said city, after a vote of its electors approving the issue of such bonds, this court held that the provision for the payment of the added interest upon said bonds would in effect increase the amount of the indebtedness which the electors had by their votes approved, and would to that extent be a violation of the constitutional inhibition. And the court goes on to say: The authorities in other jurisdictions holding the same view are Deland v. Platt Co. (C. C.) 54 Fed. 823; David v. Timon (Tex. Civ. App.) 183 S. W. 88; Scott v. Forrest, 174 Ky. 672, 192 S. W. 691; Percival v. City of Covington, 191 Ky. 337, 230 S. W. 300; Wullenwaber v. Dunigan, 30 Neb. 877, 47 N. W. 420, 13 L. R. A. 811; Lawson v. Kanawha County Court, 80 W. Va. 612, 92 S. E. 786. We do not, however, deem it necessary to go so far in this case as to hold that a contractual relation, in the ordinary sense of the term, has been created between the electors of the city of Los Angeles and the officials thereof by the proposal and approval of these bond issues, but we are satisfied that a status analogous to such relation was created through the exercise of the constitutional right of the electors of said city in approving the creation of the bonded indebtedness represented in these two bond issues upon the express conditions and assurances contained in the act of 1901, which may not be changed in the manner and to the extent it is sought to be changed under the provisions of the act of 1921, without working, in effect, a fraud upon the electors through securing their votes for the approval of these bond issues upon terms and conditions which will not be It is not intended by anything said in this kept if the attempted sale of these bonds be- opinion to suggest or intimate that there was low their par value is given the sanction of any actual fraudulent intent on the part of this court. In the case of Wallace v. Ball, the officials of the city of Los Angeles in 205 Ala. 623, 88 South. 442, the court, in seeking to take advantage of the terms of dealing with a similar constitutional provi- the statute of 1921 by disposing of these bond sion to ours, and with similar situation to issues at less than their par value. Neverthat presented in these cases, through the at-theless so to do, either with or without the tempted legislation identical in effect to that of the statute of 1921, says: "If the terms and conditions submitted to the electors may be departed from, and such election held to authorize the issuance of bonds under other terms and conditions, a door will submit a proposition so favorable as to secure be opened authorizing the common council to beyond question a favorable vote, and then change the conditions as to rate of interest and otherwise, even without any fraudulent purpose or intent, so that, if again submitted, an overwhelming defeat would result. * In the case at bar, where the question arises bethat the city has no power to issue them in a fore the bonds have been delivered, we hold form which does not substantially comply with the terms stated in the ordinance of submission and notice of election, and with the statute under which the proceedings were had." sanction of said act, would be to accomplish a purpose directly violative of one of the essential conditions upon which the constitu"A majority of the voters answered by ballot, tional approval by the electors of said city 'Yes.' Now the Legislature attempts by this act, without any clear intimation thereof in its of these bond issues was obtained, and in title, to authorize these bonds sold at a dis- that sense a fraud would be wrought by percount below par-which will net to the pur-mitting that condition to be violated by the chaser 7 per cent. per annum on his investment. The interest on a bond is a part of the bond. If the Legislature can increase the rate of interest or sell the bonds below par after the voters authorized a sale at par and at 5 per cent. interest, then they can take away entirely from the majority of the voters the right to have the bonds issued. The Constitution gives the Legislature the right to fix the mode and manner of getting the will of the qualified voters on a bond issue; and it gives to the majority of the qualified voters at the election the right to authorize the issuance of the bonds by the board of revenue. The voters having fixed by ballot the amount of the bond issue, the maximum rate of interest, and under a law stating they must | SLOANE, J.; SHURTLEFF, J.; LENNON, J. sale of these bonds below par. For this reason we are constrained to hold that the authorization attempted to be conferred upon said city of Los Angeles to dispose of the unsold portion of these bond issues for less than their par value by the act of 1921 is invalid, and hence that the plaintiffs and intervener in these actions were entitled to an injunction restraining such attempted or threatened sales. The judgment is reversed. We concur: WASTE, J.; WILBUR, J.; (203 P.) Act Cong. July 26, 1866, § 9 (U. S. Comp. of possession rights to the use of water have St. § 4647), providing that whenever by priority vested and accrued and are recognized by local customs, laws, and the decisions of courts, the possessors and owners thereof shall be maintained and protected therein, refers to the customs, laws, and decisions of the courts of the particular state in which the appropriation is 3. Waters and water courses 138-Riparian owner's rights not affected by any interference or use below his land. SHAW, C. J. I concur in the foregoing | 2. Waters and water courses 19-Statute opinion. I wish to add, however, that, in protecting water rights recognized by local my opinion, the vote of the people, by which customs, etc., construed. the city was authorized to sell the bonds at a price not less than par, constituted a part, and a material part, of the contract evidenced by the bonds, as stated in Bank v. Escondido Irr. Dist., 144 Cal. 329, 77 Pac. 937. The city is the nominal obligor or promisor on the bonds. It has no authority to make the promise and issue the bonds, except such as it obtained by this vote, and that author-made, and in which the land affected lies. ity was conditioned that the buyer of the bonds, the promisee, should pay to the city at least the par value as the consideration thereof. The real payors of the bonds are the people who pay the taxes levied to raise the fund for that purpose. They are, under the constitutional scheme, in substance and effect the principals whose authority must be first given, in order to authorize their agent, the city, to make the contract. This authority, as evidenced by the records of the election at which the authority was given, must be considered as a part of the contract, at least to the extent that the conditions therein stated cannot be disregarded by the city in selling the bonds, nor by the purchaser at the sale, and, this being so, it necessarily follows that an act of the Legislature purporting to authorize a disregard thereof would, if valid, impair a material portion of the contractual obligation. (187 Cal. 674) The rights of a riparian owner in the waters of an abutting stream are not affected by any interference with the waters of the stream, made on privately owned land after they have passed below the boundaries of his land, and such use below, no matter how long continued or what may be the nature of the claim of right thereto, in no manner affects the riparian rights of the upper owner, since to establish a right by prescription, the acts by which it is sought to establish it must invade the rights of the party against whom it is set up, and afford ground for an action. 4. Waters and water courses 21-Diversion of water on land of United States gives right to water superior to riparian rights of subsequent purchaser of public land lying above. Under Act Cong. July 26, 1866, § 9 (U. S. Comp. St. § 4647), and Act July 9, 1870, § 17 (U. S. Comp. St. § 4648), where the diversion of water from a river is made on land then belonging to the United States, the right of the appropriator to the water thereby taken is superior to the riparian rights of a subsequent purchaser of land from the United States lying above the point of diversion. SAN JOAQUIN & KINGS RIVER CANAL & 5. Waters and water courses MILLER & LUX, Inc., et al. v. SAME. (Sac. 3119, 3120.) (Supreme Court of California. Jan. 4, 1922. Rehearing Denied Feb. 2, 1922.) I. Waters and water courses 19-Where neither local customs, laws, nor decisions do not recognize rights of lower appropriator superior to upper, acts of Congress do not create right. Inasmuch as neither the local customs, laws, nor decisions of the California courts had ever recognized or upheld the doctrine that water rights acquired by an appropriation or diversion on private land would be superior to the riparian rights pertaining to land above the place of diversion, Act Cong. July 26, 1866, § 9 (U. S. Comp. St. § 4647), supplemented by Act July 9, 1870, § 17 (U. S. Comp. St. § 4648), protecting rights so recognized neither created such superior right nor provided for the maintenance or protection of the same. 21-Appropri ation of waters on land belonging to state not paramount to riparian rights of public lands above place of diversion. Where appropriations of water were made in 1871 and 1872, and the headgates and dams of the appropriators' canals were situated on lands classed as swamp and overflow lands granted to the state by Act Cong. Sept. 28, 1850 (U. S. Comp. St. §§ 4958-4960), but not patented until 1895, such appropriations were not, under Act Cong. July 26, 1866, § 9 (U. S. Comp. St. § 4647), supplemented by Act July 9, 1870, § 17 (U. S. Comp. St. § 4648), paramount to the riparian rights of one subsequently purchasing public lands of the United States situated above the place of diversion. 6. Public lands 58-Title to swamp land relates back to date of grant. Under Act Cong. Sept. 28, 1850 (U. S. Comp. St. §§ 4958-4960), granting swamp and overflowed lands to the state, when land was identified and a patent issued to the state by the United States in 1895, the title so transferred to the state related back to the year 1850, and inured to the benefit of the state and its successors in interest for all purposes For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes as if the legal title to the land finally identified | failed to do some act which it was within his had passed at the date of such act. power to do, and the person claiming the estoppel must have relied on such failure to such an extent and for such a period that the subsequent doing of the act would cause him injury. 7. Waters and water courses 19-Desert Land Act, declaring waters free for appropriation, refers only to desert land. The Desert Land Act March 3, 1877 (U. S. Comp. St. §§ 4674-4678), providing that the right to the use of water shall depend on bona fide prior appropriation, and that all surplus water above actual appropriation and use shall remain and be free for appropriation and use by the public for irrigation, mining, and manufacturing purposes, subject to existing rights, applies only to desert lands, and does not apply to all the public lands of the United States, so as to make rights under appropriations of water paramount to riparian rights. 8. Waters and water courses 33-Determination by commissioner that lands are "desert lands" must be shown by plaintiff if material. In an action to quiet title to water appropriated from the San Joaquin river as against upper riparian owners who acquired title after the passage of the Desert Land Act (U. S. Comp. St. §§ 4674-4678), which committed the question of determining what were desert lands to the Commissioner of the General Land Office, it was incumbent on plaintiff to show the fact, if material to his case, that such determination had been made with respect to the land in question, and in the absence of such showing it is presumed no such determination by the Commissioner had been made. 9. Waters and water courses 152(6)-Burden on lower appropriator to show appropriation and use for public purposes were known to upper owner, if material. In an action to quiet title to water rights by one who had appropriated water by means of canals and devoted it to public use for more than 40 years, as against upper owners who had permitted the water to flow by their lands without any use thereof, the burden was on plaintiffs to show defendant's knowledge of their appropriation and use of the water, if material, though such appropriation and use were notorious. 10. Waters and water courses ~152(8) — Finding that upper owners did not know of appropriation and use of water not contrary to the evidence. 12. Waters and water courses 138-Upper riparian owner without right to interfere with lower appropriation not estopped from asserting rights to water. Since courts had adopted the rule that a diversion below one's riparian land did not concern or injure him, and it had become a rule of property, an upper owner was not estopped from asserting his riparian rights to the injury of the lower owner merely because he had not used the water on his land. 13. Waters and water courses 129-Diverter may obtain title by prescription against lower owner even if public service company. A person, by taking water from a stream above the place of diversion of water therefrom by a public service corporation for public use, may acquire title by prescription even as against such public use, whether he be a riparian owner or not. Edward F. Treadwell, of San Francisco, for appellants. Snook & Church and Charles E. Snook, all of San Francisco, for respondent White & Friant Lumber Co. Harris & Hayhurst, of Fresno, for respondents F. M. Helm and others, T. R. Burnham and others, G. A. Ferguson, H. G. Johnson and Riverside Vineyard Co. In an action to quiet title to water rights by one who had appropriated water and devoted it to public use for more than 40 years, as against upper owners who had made no use of the water, a finding that the appropriation and use of such water, though notorious, was unknown to the upper owners, held not contrary to the evidence, consisting of extracts from newspaper articles referring to the size of the canal and the extent of territory to be irrigat-John Widney. ed thereby. II. Waters and water courses 138-Elements of estoppel to assert riparian rights stated. To constitute an estoppel in favor of an appropriator of water, as against a riparian owner, the person sought to be estopped must have Drew & Drew, of Fresno, for respondents R. M. Widney, of Pacoima, for respondent SHAW, C. J. In each of the cases above entitled the plaintiff appeals from the judgment. The two cases were begun separately, and separate pleadings, findings and judgment were filed and made in each case. were, however, tried together in the court be For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes They |