Goldsmith v. City of Baker City

• Decision Date: 31 July 1897
• Citation: 49 P. 973,31 Or. 249
• Parties: GOLDSMITH v. CITY OF BAKER CITY.
• Court: Oregon Supreme Court

49 P. 973

31 Or. 249

GOLDSMITH v. CITY OF BAKER CITY.

Supreme Court of Oregon

July 31, 1897

Appeal from circuit court, Baker county; Robert Eakin, Judge.

Action by B. Goldsmith against the city of Baker City. A demurrer was sustained to the complaint, and plaintiff appeals. Reversed.

This is an action against Baker City to recover the sum of $2,403.26 alleged to be due upon certain city warrants issued to various persons and assigned to the plaintiff. The complaint contains 53 separate causes of action, and the averments of each being substantially the same, except as to the date name, and amount, it will be sufficient for the purpose of the question involved to set out the allegations of the first cause of action, which are as follows: "That defendant is, and at all times herein mentioned was, a municipal corporation, incorporated, organized, and existing under and pursuant to the laws of the state of Oregon. That on October 1, 1890, the defendant executed and delivered to one Lene Small its certain warrant, in words and figures following, to wit: 'Class B. Baker City, October 1st, 1890. No. 75. $1.25. To the Treasurer of Baker City, Oregon: Pay to Lene Small or bearer one and 25/100 dollars, for 5 drills to Sept 20. Fire,--and charge to the general fund. By order of the common council. S.B. McCord, Mayor. Wm. H. Packwood, Sr. Auditor and Clerk.' That on February 2, 1891, said warrant was duly presented to the treasurer of the defendant, and payment thereof then demanded. That payment was then refused, and said refusal was indorsed in words and figures following, to wit: 'Presented Feb. 2nd, 1891. No funds. This warrant draws interest from this date at 8 per cent. per annum. Page 82, vol. _____. B.F. Murphy, City Treasurer.' That prior to the bringing of this action said Small sold said warrant, and, for a valuable consideration, assigned all his interest therein to plaintiff. That no part of said warrant, principal or interest, has been paid." The court below sustained a demurrer to the complaint on the ground that an action at law cannot be maintained on the warrants in suit, but that the remedy is by mandamus, and plaintiff appeals.

Walter S. Perry, for appellant.

Will R. King, for respondent.

BEAN J. (after stating the facts).

By section 352 of the Code it is provided, in effect, that no execution shall issue on a judgment recovered against a public corporation of the state, but that upon the presentation of a certified transcript of the docket, and memorandum of the satisfaction thereof, the proper officer of the corporation shall draw an order on its treasurer for the amount of the judgment in favor of the person for whom the same was given, and which order shall thereafter be presented for payment and paid with like effect and in like manner as other orders upon the treasury of the corporation. In view of this provision of the statute, the defendant contends that the only remedy on a city warrant is by mandamus, because all the plaintiff could obtain on a judgment in his favor in an action at law would be another warrant issued in the manner provided by the statute, and he would therefore be in no better position than before. But, although no execution can issue on a judgment recovered against a municipal corporation, it does not follow that the holder of a city warrant like those in suit should be denied the right to sue the municipality thereon, and reduce his claim to a judgment. These warrants are but evidence of indebtedness, and constitute no final adjudication, as against the city, of the claims which they represent. They afford prima facie evidence that the city is legally indebted to the holder thereof, but do not conclude it on that point. They are, in legal effect, nothing more than nonnegotiable promissory notes of the city, open to all defenses in the hands of bona fide holders available as between the original parties. Clark v. City of Des Moines, 19 Iowa, 199; Wall v. Monroe Co., 103 U.S. 77. As said by Mr Justice Field in the case last referred to: "There has been a great number of decisions in the courts of the several states upon instruments of this kind, and there is little diversity of opinion respecting their character. All the courts agree that the instruments are mere prima facie, and not conclusive, evidence of the validity of the allowed claims against the county by which they were issued. The county is not estopped from questioning the validity of the claims, and when this is conceded the instruments conclude nothing as to other demands between the parties." And to the same effect are 1 Dill.Mun.Corp. § 487; 1 Daniel, Neg.Inst. § 427; 1 Rand.Com. Paper, § 337. This being so, it would be competent for the defendant to urge their invalidity as a ground for refusing to pay the warrants in question; and, as an action at law...