State Bank of Miami v. City of Miami

• Decision Date: 24 November 1914
• Docket Number: 3358.
• Citation: 144 P. 597,43 Okla. 809,1914 OK 593
• Parties: STATE BANK OF MIAMI v. CITY OF MIAMI.
• Court: Oklahoma Supreme Court

144 P. 597

43 Okla. 809, 1914 OK 593

STATE BANK OF MIAMI v. CITY OF MIAMI.

No. 3358.

Supreme Court of Oklahoma

November 24, 1914

Syllabus by the Court.

(a) Section 26, art. 10, of the Constitution, contemplates that each municipality shall operate upon a cash basis, and the provisions of chapter 14, art. 7, Comp. Laws 1909 (sections 754-769), which attempt to prohibit the transfer of the surplus in a fund to a depleted fund, is repugnant thereto.

(b) Where all expenses chargeable to a certain fund for the current year have been paid, leaving a surplus, the same may be transferred to any fund or funds having a deficit for that year.

Where warrants and claims sued upon are prima facie valid, and the defendant city seeks to avoid payment on the ground that the contracts upon which such warrants and claims are based were incurred in excess of a constitutional or statutory limitation, the burden of showing that such debt limit had been exceeded is upon the city.

A city has no right to apply the revenue provided for the current year to the satisfaction of obligations of a preceding year so long as there are or may be legal claims outstanding against the city for such current year; and, where the revenue provided for the current year is misapplied to the payment of obligations of a preceding year, the funds so misapplied will be considered as in the treasury in determining whether or not a constitutional or statutory limitation has been exceeded.

Error from District Court, Ottawa County; Preston S. Davis, Judge.

Action by the State Bank of Miami against the City of Miami. Judgment for defendant, and plaintiff brings error. Reversed and remanded for new trial.

F. D Fulkerson, of St. Joseph, Mo., and Asp, Snyder, Owen & Lybrand, of Oklahoma City, for plaintiff in error.

Dick Rice, of Bentonville, for defendant in error.

LOOFBOURROW J.

The petition in this case consists of 45 counts, of which 26 are based upon city warrants and 19 upon open accounts. The said warrants were executed in due form by the city of Miami and show upon their face that they were drawn upon the contingent, the salary and the street and bridge funds. The answer consists, first, of a general denial, and further alleges, in substance, that each and all of the city warrants set forth in the several causes of action are and were, at the date of their issuance, in excess of 80 per cent. of the taxes levied for city purposes during said fiscal year ending June 30, 1910. From a judgment in favor of the city of Miami plaintiff in error appeals.

Prior to proceeding to trial the parties made the following stipulation:

"At this time the defendant, by its attorney, Dick Rice, in the case of the State Bank of Miami against the City of Miami, No. 449, admits that the services and the warrants mentioned in each of the several different causes of action set out in the petition were performed and issued to the several different parties therein named, except in cause of action No. 37, wherein E. T. Reynolds claims that there is due him from the city the sum of $474.50, and also except the item mentioned in cause of action No. 35, wherein the Coyne Lumber Company claims that there is due it for material furnished, the sum of $282.50.

Now it is further agreed by and between the parties hereto that the plaintiffs in said cause of action admit that the services mentioned in each of said causes of action and the warrants mentioned therein were performed and issued for labor and services and material furnished for the fiscal year ending June 30, 1910."

Thereupon the court heard the testimony of witnesses as to said causes of action Nos. 37 and 35, respectively, and, there being no offer on the part of the city to discredit said claims, the court found that the same had been duly established and stood upon the same footing at that time with the claims based upon the city warrants.

The question involved is whether or not any of the indebtedness was incurred or contracts made were in violation of any constitutional or...