City of Marcus v. Ofner

• Decision Date: 16 September 1918
• Docket Number: 14440.
• Citation: 175 P. 31,103 Wash. 478
• Parties: CITY OF MARCUS v. OFNER et al.
• Court: Washington Supreme Court

175 P. 31

103 Wash. 478

CITY OF MARCUS v. OFNER et al.

No. 14440.

Supreme Court of Washington

September 16, 1918

Department 1. Appeal from Superior Court, Spokane County; Wm. A. Huneke Judge.

Action by the City of Marcus against Samuel Ofner and Alexander Lauber, doing business under the firm name of Northwest Loan Association. From judgment for defendants, plaintiff appeals. Affirmed.

L. B Donley and L. C. Jesseph, both of Colville, for appellant.

F. A McMaster, of Spokane, for respondents.

MAIN C.J.

Plaintiff a city of the fourth class, brought this action to recover the possession of certain improvement district warrants. The trial resulted in a judgment for the defendants, and the plaintiff appeals.

Briefly, the facts are: Certain improvement district warrants, all of which read 'Pay to the order of,' issued by appellant in 1911, were presented by the payees to the city treasurer, who indorsed them 'Not paid for lack of funds.' The warrants were indorsed in blank by the payees, and later transferred to the First State Bank of Marcus, and by the bank deposited with the city treasurer as indemnity against loss of city funds deposited in the bank. The bank failed, whereupon the city employed two attorneys, one of whom was W. C. Stayt, to recover from the bank, ex-city treasurer, and his bondsmen the amount due the city. The city delivered to Stayt the warrants for use during the trial. While in his possession, and before trial was had, he pledged the warrants (which bore only blank indorsement of payees) to defendants herein as security for loans made by them to him.

The sole question for determination is whether the respondents having acquired the warrants in good faith as security for the loans from one having rightful possession of them, had a superior title thereto to that of the appellant. There is no substantial distinction between this case and the case of Fidelity Trust Co. v. Palmer, 22 Wash. 473, 61 P. 158, 79 Am. St. Rep. 953. In that case the plaintiff sued to recover the value of a city warrant which had been delivered to an attorney to be used as evidence in a case then pending in the superior court. The attorney, instead of returning the same to his principal, sold it to the defendant, who paid value therefor. At the conclusion of the evidence in that case for the plaintiff, the trial court upon defendant's motion directed a judgment in his favor. The purchaser there,...