Quaker City Nat. Bank v. City of Tacoma

• Decision Date: 10 January 1902
• Citation: 27 Wash. 259,67 P. 710
• Parties: QUAKER CITY NAT. BANK OF PHILADELPHIA v. CITY OF TACOMA et al.
• Court: Washington Supreme Court

67 P. 710

27 Wash. 259

QUAKER CITY NAT. BANK OF PHILADELPHIA v. CITY OF TACOMA et al.

Supreme Court of Washington

January 10, 1902

Appeal from superior court, Pierce county; J. A. Williamson, Judge.

Application by the Quaker City National Bank of Philadelphia for mandamus against the city of Tacoma and another to compel payment of a warrant issued by the city to the appelicant. From a judgment sustaining a demurrer to the complaint, the applicant appeals. Reversed.

E. R. York, for appellant.

William P. Reynolds and Emmett N. Parker, for respondents.

FULLERTON J.

The appellant is the holder of a warrant issued by the city of Tacoma dated October 10, 1892, and payable out of a special street-improvement fund. In this proceeding the appellant seeks a writ of mandate against the city and its treasurer to enforce the payment of the warrant. The application was made to the superior court of Pierce county on November 7, 1900. In its affidavit filed in support of the application, the appellant alleged, in effect, that the fund upon which its warrant was drawn was insufficient in amount to meet all of the warrants drawn against it; that the city collected the entire fund, and misappropriated a part of it by paying warrants drawn against it which were subsequent in time and in the order of their issuance to the appellant's warrant, thereby exhausting the fund, leaving the appellant's warrant unpaid in part. The date of the misappropriation is alleged to be June 30, 1893. It is further alleged that the city of Tacoma, by ordinance duly approved on September 21, 1900, created a fund designated as the 'Street and Sewer Improvement Deficiency Fund,' which ordinance contained, among others, the following provisions:

'Sec 2. That out of said fund shall be paid any and all legal warrants heretofore issued by the city of Tacoma for the improvement of any street or alley, and for the construction of any sewer, which said warrants are now outstanding and unpaid, and for the payment of which no provision has heretofore been made; and all legal warrants heretofore issued by the city of Tacoma for the improvement of any street or alley, and for the construction of any sewer, which said warrants are in excess of the assessment rolls against which they were drawn, and which said assessment rolls have been collected in full, and for the payment of which said warrants no provision has heretofore been made.

'Sec 3. That after the deficiency now existing in the interest fund to the amount of $3,562.94 shall have been paid into said fund, the balance of all moneys which may hereafter be received from George W. Boggs and his sureties, and from J. W. McCauley and his sureties, and from the banks and their sureties in which said Boggs and McCauley as city treasurers have heretofore deposited moneys belonging to the city of Tacoma, shall be paid by the city treasurer upon its receipt into said street and sewer improvement deficiency fund, and said money, or so much thereof as may be needed, shall be used for the payment of warrants designated in section 2 of this ordinance.'

It is then alleged that the city has on hand, in the fund created by the ordinance, sufficient money to pay the balance due upon the appellant's warrant, which is applicable to its payment, and that it has in its general fund also moneys sufficient to pay the warrant. To the application the respondents demurred on the grounds that sufficient facts were not stated to entitle the applicant to any relief, and that the proceeding had not been instituted within the time limited by law. The demurrer was sustained by the trial court, whereupon the appellant refused to plead further, and judgment of dismissal and for costs followed.

It is the settled doctrine of this court that misappropriation of moneys belonging to a special fund of a city by the city will render it generally liable to the holders of warrants drawn upon the special fund to the amount of the moneys as misappropriated, and that the payments of warrants drawn upon a special fund, issued subsequent in time to other warrants drawn upon the same fund, is such a misappropriation, if the effect of such payments is to exhaust the fund and leave prior warrants unpaid. Potter v. City of New Whatcom, 20 Wash. 589, 56 P. 394, 72 Am. St. Rep. 135; Northwestern Lumber Co. v. City of Aberdeen, 22 Wash. 404, 60 P. 1115; Potter v. City of New Whatcom (Wash.) 65 P. 197; Paving Co. v. Sternberg (Wash.) 66 P. 121. But it is plain that a city, by misappropriating moneys belonging to a special fund, does not...