School District No. 5 v. The First National Bank of Wabash

• Decision Date: 09 November 1901
• Docket Number: 12,491
• Citation: 63 Kan. 668,66 P. 630
• Parties: SCHOOL DISTRICT NO. 5 v. THE FIRST NATIONAL BANK OF WABASH
• Court: Kansas Supreme Court

66 P. 630

63 Kan. 668

SCHOOL DISTRICT NO. 5 v. THE FIRST NATIONAL BANK OF WABASH

No. 12,491

Supreme Court of Kansas

November 9, 1901

Decided July, 1901.

Error from Seward district court; WM. EASTON HUTCHISON, judge.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

1. SCHOOL-DISTRICT WARRANTS--Limitation of Actions. Orders were drawn by the proper officers of a school district on the treasurer for the payment of money out of a designated fund. In an action against the district on the warrants, it appeared that at no time since the debt was created had there been any money in the treasurer's hands applicable to the payment of the orders. Held, that the school district was estopped from interposing the defense that the action was barred by the statute of limitations.

2. SCHOOL-DISTRICT WARRANTS--Statute Considered. The effect of sections 6011 and 6012 of the General Statutes of 1901, requiring the registration of warrants, considered.

W. A Frush, and H. F. Mason, for plaintiff in error.

T. A. Scates, Reeves & Kirkpatrick, and S. S. Ashbaugh, for defendant in error.

OPINION

SMITH, J.:

On January 3, 1889, the director and clerk of school district No. 5 of Seward county executed aud delivered to John W. Hixon & Co. four warrants on the school-district treasurer. They are identical in dates and amounts. The following is a copy of one of them:

No.

OFFICE OF SCHOOL DISTRICT CLERK.

January 3, 1889.

"Name of Treas. M. L. Trout.

P. O. address Springfield, Kansas.

"Treasurer school district No. 5 of county of Seward, state of Kansas: Pay to John W. Hixon & Co. or order, on or before July 1, 1889, the sum of two hundred dollars, with interest at twelve per cent. per annum from date till paid, for material and labor furnished on schoolhouse, out of any funds in your possession raised or appropriated for such purpose.

$ 200.

JOSEPH WAGGONER, District Clerk.

H. P. LARRABEE, Director."

The orders were presented for payment to the school-district treasurer on September 9, 1890, and were indorsed by him "Not paid for want of funds." There has never been any money in the hands of the treasurer to pay these warrants. This action was commenced in the court below on March 22, 1895, by defendant in error, the assignee and holder of the warrants.

The sole question to be decided is whether the action was barred by the statute of limitations. If the statute began to run on July 1, 1889, when the orders were payable, then the time for the commencement of an action expired on July 1, 1894, over eight months before suit was begun. If, however, the time is to be counted from the date of presentation, the action was commenced less than five years from that time. If the failure to provide funds to meet the payment of the obligations prevents the district from interposing the defense it has set up, then the due dates of the warrants and the time of the demand for payment become immaterial.

It has been decided by this court that a city may anticipate the revenue of the year by issuing warrants payable at such time during the year as the taxes will probably be collected, and that such warrants are "simply drafts on the revenue then anticipated." (City of Burrton v. Savings Bank, 28 Kan. 390.) We find no limitation on the power of school-district boards which prevents them from doing likewise. Under sections 6011 and 6012 of the General Statutes of 1901, warrants not paid for want of funds must be registered in the regular order of their presentation and must be paid in such order, and when sufficient money is collected the treasurer must set it apart to pay them in turn. Statutes of limitation give the defendant a right to resist the payment of a demand based upon some act of negligence or omission of the plaintiff. But, in the case at bar, the defendant. would found its right to defeat the claim sued on by asserting its own negligence. It has never set the machinery of the law in motion to collect the money required to meet its obligations. It has remained since the debt was contracted in a continued state of insolvency created by its own act. We need not do more than to quote the language of Mr. Justice Brewer, in Lincoln County v. Luning, 133 U.S. 529, 532, 10 S.Ct. 363, 364, 33 L.Ed. 766, 767:

"The coupons, which by the general limitation law would have been barred,...