People ex rel. City of Bellflower v. Bellflower Cty. Water Dist.

It being contended that defendant water district, upon the inclusion of its entire area within the corporate limits of relator city, became merged by operation of law with that municipality, the existence of defendant was challenged by this quo warranto proceeding. After a trial, mostly on questions of law, judgment was rendered for defendant from which the People appeal.

The complaint alleged, and the answer admitted, that Bell-flower became an incorporated city on September 3, 1957, on

Defendant contended, and its answer in effect so set forth, that the Downey case on its facts was distinguishable. Thus, it is alleged that while defendant’s entire territory is within the limits of the city, property is owned by defendant outside the municipality’s boundaries, to wit, a vault house and pipeline situated in the City of Downey. Too, and by way of affirmative defenses, it is alleged that the action is barred by section 30325, Water Code, requiring that proceedings contesting defendant’s validity be brought within three months from its incorporation; that under the First Validating Act of 1958 (Stats. 1958, ch. 10) any action challenging defendant’s existence was required to be commenced within six months from April 7, 1958; and finally, that certain bonds in the face amount of $775,000 (paid down to $745,000 at the commencement of this action) were issued after September 3, 1957 (the date of alleged merger and dissolution) which, if voluntarily assumed by the relator city under the theory of automatic merger, would (1) violate the limitations imposed upon its bonded debt, and (2) impair the existing contract between the bondholders and defendant by the transfer of the latter’s lia

Initially, we dispose of the claim additionally made in defendant’s brief that while permission to sue was properly granted by the Attorney General (People ex rel. Conway v. San Quentin Prison Officials, 217 Cal.App.2d 182 , 183 [ 31 Cal.Rptr. 649 ]), plaintiff made no showing or representation that leave to appeal was likewise obtained. (People v. City of Huntington Beach, 128 Cal.App.2d 452 , 455 [ 275 P.2d 601 ].) Although some references thereto should have been made in the opening brief, there is included as an appendix to the reply brief a true and correct copy of a letter from the Attorney General to the relator’s counsel (Mr. Googooian), timely dated, in which the former consents to the taking of the instant appeal. We therefore pass to the remaining points requiring determination.

If, as argued by defendant, the present case is distinguishable from Downey, and a supplementing decision similarly entitled ( 220 Cal.App.2d 539 ), then the several defenses above mentioned are good. The claim for distinguishability consists in the main of certain legislative enactments assertedly evidencing a legislative intent opposed to the application of the doctrine of automatic merger as reenuneiated in the Downey cases. That automatic merger may thus be prevented was clearly recognized in the first Downey case : “Whether merger occurs depends not alone on ‘the probability of a potential conflict between corporations possession dual authority,’ but rests upon the intent of the Legislature in the premises. [Citations.] The doctrine of implied legislative intent developed in Petition of Sanitary Board of East Fruitvale Sanitary Dist., 158 Cal. 453 [ 111 P. 368 ], is based on a recognition of the Legislature’s absolute power over public corporations established as agencies of the state for purposes of local government. [Citation.] ” (P. 797.) The Fruitvale ease declared that in the absence of a specific provision in the act creating the special district that it shall continue in existence upon being entirely included within the boundaries of a municipal corporation, it must be implied that the Legislature intended that a merger occur and the district cease to exist. ( 202 Cal.App.2d 786 , 797-798.) After further reference to the Fruitvale case, the deci

That the trial court for the reasons above stated was persuaded of the present proceeding’s distinguishability is manifest from its findings of fact and conclusions of law drawn therefrom, several of which are opposed to the determinations (expressly or impliedly) made in the Downey cases. For example, it found that defendant owned property outside the district’s boundaries, although in the first Downey ease mention was made (at page 792) of City of Escalon v. Escalon Sanitary Dist., 179 Cal.App.2d 475 [ 3 Cal.Rptr. 889 ], which-holds that the purchase of real property and the acquisition of a right-of-way outside of the district “did not make such property a part of the district.” (Pp. 481, 482.) The trial court also concluded, from facts theretofore found, that if merger and dissolution by operation of law had occurred on September 3, 1957, the city would have to assume all of the duties and obligations of the district, including the obligations for retiring the outstanding bonded indebtedness of the district; but in the first Downey case a contrary view (extensively discussed) was taken of this claimed defense to the objectives sought by the instant action. Thus, “We find no merit in this argument, for under the merger the city would not only sue-, ceed to all of the property and assets of the extinguished district but would inherit all of its liabilities including the fundamental obligation of bonded indebtedness [citations]; the city would be obliged to assume the indebtedness and there is no limitation on its power to do so which could result in an impairment of the bondholder’s contract; and the city has the same powers with respect to taxation to protect the bondholders as the district.” (P. 804.) Also referred to in the. findings is the enactment by the Legislature, following the formation of the district on March 27, 1957, and the incorporation of the city later that year, of its First Validating Act of 1958 (Stats. 1958, ch. 10), effective April 7, 1958. It was not expressly found, nor was it concluded, that the present action . was barred by the six months’ limitation found in the sub

It seems that the present proceeding was instituted on August 17, 1963, and judgment was entered on July 23, 1965; it was therefore “pending” within the meaning of the “savings clause” (as the material above italicized is referred to in the briefs) on the “effective date of this division” if, as the court erroneously concluded from a finding so made, it became effective when ‘ ‘ Said bill was signed into law by the Governor of the State of California on July 17, 1965.” Accordingly, unless this “saving clause” has no legal applicability to the situation at bar, the omission of the trial court to make reference thereto in its findings, even under its erroneous view of the law’s effective date, becomes significant in light of the rule of statutory construction (Code Civ. Proe., § 1858) providing, among other things, that “In the construction of a statute . . . the office of the Judge is simply to ascertain and declare what is in terms or in substance contained therein, not to insert what has been omitted, or to omit what has teen inserted; . . .” (Italics added.)

Not being an act calling elections, providing for tax levies or appropriations for current expenses, the subject legislation did not become effective, of course, until 90 days after the final adjournment of that particular session—in this instance September 17, 1965. (Cal. Const., art. IV, § 1. ) “It has been uniformly held in this state that a statute has no force whatever until it goes into effect pursuant to the law relating to legislative enactments. It speaks from the date it takes effect and not before. Until that time it is not a law and has no force for any purpose.” (People v. Righthouse, 10 Cal.2d 86 , 88 [ 72 P.2d 867 ].) Defendant contends, and therefore concedes, that a court must dispose of the case in accordance with the law existing at the time of its decision; it accordingly argues, as it must necessarily do, that the statute in question must be given retroactive application. But a statute is presumed to be prospective only in operation and will not be retroactively

There remains for consideration the effect of the word “may” in the concluding provision of the saving clause that “the court may in any such legal proceedings make and enter judgment in accordance with the law existing prior to the effective date of this decision.” It is contended by defendant that the use of the word “may” leaves the court some discretion in the premises even though, as we have heretofore concluded, by its use of the word “shall” the Legislature has declared to the contrary. Emphasized in this connection is section 14 of the Government Code providing that “ ‘may’ is permissive.” But such provision is subject to section 5 of the same code which states: “Unless the provision or the context otherwise requires, these general provisions, rules of construction, and definitions shall govern the construction of this code.” That being so, “It is a fundamental rule of statutory construction that a provision under consideration by the courts should, wherever possible, be given such construction as will reasonably achieve its object and purpose within the context of the legislative scheme.” (Hochfelder v. County of Los Angeles, 126 Cal.App.2d 370 , 373-374 [ 272 P.2d 844 ].) With respect to the use of the word “may” in another section of the Government Code, the court said in Hollman v. Warren, 32 Cal.2d 351 at p. 356 [ 196 P.2d 562 ] : “Section 8200 of the Government Code provides that the governor ‘may’ appoint notaries in such number as he deems necessary. Ordinarily, ‘may’ is permissive (Gov. Code, § 14), but if the provision or context otherwise requires it that meaning is not required (Gov. Code, § 5). It is clear that a mandatory duty to appoint notaries public is imposed.” Too, since this is a quo warranto proceeding it is held that “where persons or the public have an interest in having an act done by a public body ‘may’ in a statute means ‘must’.” (Uhl v. Badaracco, 199 Cal. 270 , 282 [ 248 P. 917 ].) In this case it seems clear that the Legislature did not intend that, after a case has been made out for the application of the exemption or exception contained in the immediately preceding provisions of the saving clause, the court would have discretion to determine whether a judgment in accordance with the law prior to the effective date of the act should be made and entered; if that were so, the express mandatory language reflected by such provisions would be meaningless.

Wood, P. J., and Fourt, J., concurred.

Respondent’s petition for a hearing by the Supreme Court was denied February 15, 1967.