Potter v. City of New Whatcom

• Decision Date: 11 May 1901
• Citation: 25 Wash. 207,65 P. 197
• Court: Washington Supreme Court
• Parties: POTTER v. CITY OF NEW WHATCOM.

65 P. 197

25 Wash. 207

POTTER v. CITY OF NEW WHATCOM.

Supreme Court of Washington

May 11, 1901

Appeal from superior court, Whatcom county; H. E. Hadley, Judge.

Action by A. Potter against the city of New Whatcom. From a judgment in favor of plaintiff, defendant appeals. Reversed.

C. H. Hurlbut, T. E. Cade, and Newman & Howard for appellant.

S. A Callvert, for respondent.

FULLERTON J.

The respondent brought this action against the appellant to recover upon certain street-grade warrants. To the answer to the complaint a demurrer was interposed, which the trial court sustained; and, upon the appellant's refusal to plead further, judgment was entered against it in accordance with the prayer of the complaint. The city brings the cause here.

From the record it appears that the appellant is the successor of the former city of New Whatcom and the city of Whatcom, which were consolidated in 1891; that prior to the consolidation the old city of New Whatcom, by ordinance passed in conformity to its charter, ordered that so much of Elk street, in that city, as lay between Alder street and the south boundary of the city, or Tyler street, should be improved in accordance with certain plans and specifications theretofore prepared by its city engineer; that the contract for the work was let to W. G. Fleming & Co., who performed the same according to the plans and specifications; and that the city, in compliance with its part of the contract, issued to them warrants aggregating the sum of $26,376.51, $19,928.98 of which were drawn upon a special fund, called the 'Fund for the Improvement of Elk Street from Alder Street to Tyler Street.' The former city of New Whatcom thereafter levied an assessment upon the property fronting upon the improved street for the purpose of meeting these warrants. This assessment was made without regard to benefits, and was never attempted to be enforced by the officers of the city levying it, or the appellant city of New Whatcom. In 1897 the appellant caused a reassessment of the property fronting upon the improvement to be made according to benefits, when it was found that the original cost of the improvements exceeded the amount of the benefits--the sum that could be lawfully assessed against the property liable to be specially assessed therefor--by the sum of $6,518.98. This assessment was, after notice, duly confirmed by the city council. Appeal therefrom by certain parties interested was taken to the superior court, which adjudged the procedure of the city council regular and valid, and on appeal to this court the judgment of the superior court was affirmed. See Bellingham Bay Imp. Co. v. City of New Whatcom, 20 Wash. 53, 54 P. 774; Id., 20 Wash. 231, 55 P. 630. The respondent holds the warrants sued upon by assignment from W G. Fleming & Co. While it appears that a considerable part of the sum assessed yet remains unpaid, and that the city has instituted proceedings to enforce its payment, it also appears that there are outstanding warrants, antedating the respondent's warrants in their order of issuance, sufficient to absorb the entire fund created by the special assessment, and that when these warrants are paid nothing will be left of the fund to apply on the warrants sued upon.

Under what circumstances a municipal corporation will become generally liable for the payment of warrants drawn upon a special street improvement fund, where the fund itself has not been made available for the payment of the warrants, is a matter that has been frequently before this court for determination. In German-American Sav. Bank of Burlington v. City of Spokane, 17 Wash. 315, 47 P. 1103 49 P. 542, 38 L. R. A. 259, the court exhaustively reviewed its former decisions, cited and reviewed many cases from other jurisdictions, and announced what it conceived to be the correct principle governing the question. It was there ruled that the municipality was not liable for the payment of such warrants out of its general fund, unless the contract expressly made it liable, or the municipality had collected the special fund and misappropriated it. This ruling, it was confessed, was not in harmony with some of the prior decisions of the court, but it was also shown that these decisions did not agree one with the other; and it was the object and purpose of the then chief justice, who prepared the opinion in that case, to set the matter at rest, and announce a rule which would serve as a guide for the determination of future cases. Since that time the court has adhered to the principles of that decision with substantial uniformity. In Wilson v. City of Aberdeen, 19 Wash. 89, 52 P. 524, the action was to recover upon warrants issued against a special street improvement fund. The municipality had failed to make the special fund available for the payment of the warrants, and it was conceded by both sides that it was without its power so to do. The appellant insisted that because of this fact the city was liable for the payment of the warrants out of its general fund. The court denied the liability of the municipality, and in passing upon the question, after citing the case of German-American Sav. Bank of Burlington v. City of Spokane, supra, used the following language: 'It is not clear whether the remedy was lost in consequence of the exhaustion of the property covered by the special liens which was of any value, or whether it was barred by lapse of time, but it would not make any difference. We regard all of these latter questions as immaterial, and view the contract as one binding the city to pay only from the special fund, as stated. And, whatever the fact may be, for the purposes of this case we adopt the concession that the remedy to prosecute the assessments...