Hughes v. Nichols, 5640

• Court: United States State Supreme Court of Idaho
• Writing for the Court: BABCOCK, District Judge.
• Citation: 50 Idaho 722,300 P. 361
• Docket Number: 5640
• Decision Date: 27 May 1931
• Parties: E. B. HUGHES, Respondent, v. GEORGE H. NICHOLS and ED WARNER, Appellants

300 P. 361

50 Idaho 722

E. B. HUGHES, Respondent,
v.
GEORGE H. NICHOLS and ED WARNER, Appellants

No. 5640

Supreme Court of Idaho

May 27, 1931

MUNICIPAL CORPORATIONS-WARRANTS-LIABILITY OF INDORSER.

1. Village warrants created no indebtedness against village, but merely created obligation to diligently collect assessments and apply proceeds to redeeming warrants, in order issued.

2. Village warrants held not "contracts for payment of money," making indorsers thereof liable to tranferee upon village's failure to pay (C. S., secs. 6063, 6064).

APPEAL from the District Court of the Fourth Judicial District, for Gooding County. Hon. D. H. Sutphen, Judge.

Action by E. B. Hughes against George H. Nichols and Ed Warner, as endorsers of village warrants. Judgment for plaintiff. Reversed.

Judgment reversed; costs to appellants. Petition for rehearing denied.

Bissell & Bird, for Appellants.

The warrants involved in this suit, being merely orders on the village officials to deliver to the payee named certain sums of money "from the St. Imp. Dist. No. 2 Fund" if and when any moneys should be in such fund, are not "written contracts for the payment of money or personal property," as the latter expression is used in C. S., secs. 6063, 6064, and therefore such statutes do not fix the rights and liabilities attendant upon the indorsement and transfer of said warrants. (Hughes v. Village of Wendell, 47 Idaho 370, 275 P. 1116; Dana v. San Francisco, 19 Cal. 486; 15 C. J. 598; 19 Cal. Jur. 807; Martin v. San Francisco, 16 Cal. 285; Radke v. Liberty Ins. Co., 37 Idaho 436, 216 P. 1040.)

In the absence of such statutes the common-law rule, and the rule which properly applies to the indorsement and transfer of said warrants from appellants to respondent, is that such assignment and transfer do not imply a warranty that the warrants will be paid or performed. (Bigelow on Bills, Notes and Checks, 3d ed., sec. 15; 5 C. J. 969; 8 C. J. 57; Newer v. First Nat. Bank, 74 Mont. 549, 241 P. 613-615.)

A. F. James, for Respondent.

An assignor of a non-negotiable written contract for the payment of money is liable to the assignee in case of non-payment if the assignee has unsuccessfully used due diligence to collect from the maker, and in any event, if the institution of such suit would have been unavailing. (C. S., secs. 6063, 6064.) Section 6064, C. S., is merely a legislative adoption and enactment into law of a rule of law which existed and still exists in a number of states independent of statute. (Goff v. Miller, 41 W.Va. 683, 56 Am. St. 889, 24 S.E. 643; 5 C. J. 969, notes 59, 60, and on page 970: also, Welsh v. Ebersole, 75 Va. 651 at 657.)

The due diligence required by C. S., sec. 6064, is the institution and prosecution of a suit against the maker of the instrument and the statute does not require the indorsee to resort to any other proceeding or to look to any other person other than the maker.

BABCOCK, District Judge. Budge, Givens, Varian and McNaughton, JJ., concur.

OPINION

[50 Idaho 723] BABCOCK, District Judge.

This action was brought by respondent, Hughes, against...