Adams County v. Ritzville State Bank
| Decision Date | 14 October 1929 |
| Docket Number | 21711. |
| Citation | 154 Wash. 140,281 P. 332 |
| Parties | ADAMS COUNTY v. RITZVILLE STATE BANK. |
| Court | Washington Supreme Court |
Department 2.
Appeal from Superior Court, Adams County; John Truax, Judge.
Three separate suits by Adams County against the Ritzville State Bank of Ritzville, consolidated for trial. Judgment for plaintiff, and defendant appeals. Affirmed.
Miller & Freese, of Ritzville, for appellant.
Richard B. Ott, of Ritzville, and G. E. Lovell, of Spokane, for respondent.
One Guy C. Sturman was employed by Adams county from August 1, 1924 to May 12, 1927, as engineer, who as such employed laborers and directed work on various roads of the county. He prepared payrolls for work done under his direction and presented them to the county commissioners for allowance. Within three years before the filing of the three suits ivolved, Sturman padded the pay rolls prepared by him by including therein the names of unknown persons, or the names of persons who had not performed any road work. Such pay rolls were approved and allowed by the county commissioners, upon which the county auditor drew warrants against the proper funds requesting the county treasurer to pay each of such fictitious persons, naming him, the respective amount due him; that is, the county auditor issued nonnegotiable warrants. The county commissioners did not know that the payees were fictitious or had not worked on the roads. The warrants were delivered to Sturman, to be delivered by him to the payees, who were supposed to be working under him out in the county. He forged the names of the nominal payees on the back of the warrants, indorsed them with his own signature and delivered them to the Ritzville State Bank of Ritzville. The bank, upon indorsing the warrants presented them to the county treasurer and received pay for them.
Upon learning of the fraud perpetrated by Sturman, and that the warrants had been issued without consideration, the county promptly brought three suits against the bank, to recover the amounts it had paid to the bank. One of the suits covered the amount paid on 18 warrants drawn on the general road and bridge fund, another one covered the amount paid on five warrants drawn on the permanent highway maintenance fund, and still another covered the amount paid on five warrants drawn on the road and bridge fund. The three suits were consolidated for trial, and in each one findings and conclusions were entered in favor of the county for the full amount sued for. The bank has appealed from judgment upon the findings. The three cases have been presented and argued together in this court, and require but one opinion.
So far as the rights of the county are concerned, these warrants, conceived in fraud and resting on no consideration whatever, are and at all times were void, notwithstanding the good faith of the bank.
The great weight of authority is that a county or city may wage any defense against its nonnegotiable warrant which it might have made to the claim upon which the warrant was founded, even when the warrant has fallen into the hands of an otherwise innocent holder. By many decisions that need not be mentioned that doctrine has been repeatedly upheld in this state, and whether the case is one of defense of the municipality against such a warrant, or one where the municipality seeks to recover money it has paid out on such a warrant, the principle is the same.
In Pacific County v. Willapa Harbor Pub. Co., 88 Wash 562, where the county was allowed to recover money it had paid by mistake and without authority in law, after stating that in this state payments made by a city in violation of law may be recovered by the city (citing cases), and after further saying that this court has frequently restrained counties from carrying out unlawful contracts and from the payment of money under such contracts (citing cases), it was said of the county cases: 'None of these actions sought the return of money illegally paid,...
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...seeking tax refunds “are actions arising out of implied liabilities to repay money unlawfully received ...” Adams Cy. v. Ritzville State Bank, 154 Wash. 140, 144, 281 P. 332 (1929).In the present case, the trial court properly applied the 3-year statute of limitations. The Supreme Court in ......
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