The Pine Tree Lumber Company v. City of Fargo

• Decision Date: 21 July 1903
• Citation: 96 N.W. 357,12 N.D. 360
• Court: North Dakota Supreme Court

96 N.W. 357

12 N.D. 360

THE PINE TREE LUMBER COMPANY v. CITY OF FARGO

Supreme Court of North Dakota

July 21, 1903

Appeal from District Court, Cass county; Pollock, J.

Action by the Pine Tree Lumber Company against the City of Fargo to recover on certain city warrants. Plaintiff had judgment and defendant appeals.

Affirmed.

M. A Hildreth, for appellant.

Under section 2183 of Political Code, the council and every city officer are prohibited from transferring money from one special fund to another. Such council and city officers are prohibited from making any such appropriation, or any contract, which would take any portion of the general funds of the city and apply it to any special improvement. Engstad et al. v. Dinnie et al., 8 N.D. 1, 76 N.W 292; Roberts v. City of Fargo, 10 N.D. 231, 86 N.W 726; City of Fargo v. Keeney et al., 11 N.D. 484, 92 N.W 836.

The plaintiff cannot recover upon any theory under the evidence. He failed to show any misappropriation of the special assessments arising from the Front street and Northern Pacific avenue funds. A general liability against a municipality cannot arise excepting in instances where the city has failed to make an assessment on account of the failure of the law to provide for a special assessment, or officers have negligently failed to do their duty, or where the funds have been misappropriated by an act of the municipality itself. Casey v. City of Leavenworth, 17 Kan. 189; Trustees of Bellview v. Hahn, 82 Ky. 1; Heick et al. v. Voight, 11 N.E. 306; Hammet v. Philadelphia, 65 Pa. 146; Chamberlain v. Cleveland, 34 Ohio 551; N. P. Lumber Mfg. Co. v. East Portland, 14 Ore. 3; Goose River Bank v. Willow Lake School Township, 1 N.D. 26, 44 N.W. 1002; Woodard v. Colhoun Co., No. 2182 Fed. Cases; Lake v. Trustees of Williamsburg, 4 Den. 520; Eilert v. City of Oshkosh, 14 Wis. 586; Whalen v. City of LaCrosse, 16 Wis. 271; Finney et al. v. City of Oshkosh, 18 Wis. 209; People v. City of Milwaukee, 10 Mich. 274; Goodrich v. Detroit, 12 Mich. 279; New Albany v. Sweeney, 13 Ind. 245; Casey v. Leavenworth, 17 Kan. 189; Swift v. Mayor, 83 N.Y. 538.

Plaintiff's complaint is upon the warrants. They show on their face that they are to be paid out of a special fund. Plaintiff cannot recover. Martin v. City and County of San Francisco, 16 Cal. 285; People v. Gray, 23 Cal. 125; Dana et al. v. City and County of San Francisco, 19 Cal. 486; Wilson v. City of Aberdeen, 52 P. 524; Ger. Am. Savings Bank v. City of Spokane, 38 L. R. A. 259.

Where work has been done under a law declared unconstitutional, and special assessments have been made thereunder, action will lie generally against the municipality on the contract. Barber v. Harrisburg, 64 F. 283; Barber v. Denver, 72 F. 336.

Benton, Lovell & Holt, for respondents.

An action on warrants drawn against a street improvement fund will lie against a city. Potter v. New Whatcom, 20 Wash. 589, 72 Am. St. Rep. 135; Terry v. City of Milwaukee, 15 Wis. 543.

The transfer of money from one fund to another being an official act of the city treasurer the presumption arises that it was legally made. And where some preceding act or pre-existing fact is necessary to the validity of an official act, the presumption in favor of the validity of the official act is presumptive evidence of such act or fact. Delaney v. Schuette, 5 N.W. 796; Nonfire v. U.S., 164 U.S. 657, 17 S.Ct. 212, 41 L.Ed. 588; U.S. Bank v. Dandridge, 12 Wheat. 64, 6 L.Ed. 552; Rankin v. Hoyt, 4 How. 327, 11 L.Ed. 996; Huey v. Van Wie, 23 Wis. 613.

Where an act is done which can only be legally done after a prior act, proof of the latter carries with it proof of the prior act. Rutherford v. Hamilton, 97 Mo. 543; Kieth v. Bingham, 100 Mo. 300; State v. Kempf, 69 Wis. 470; State v. Dugan, 110 Mo. 138; Boots v. Washburn, 79 N.Y. 207; Howard v. City of Oshkosh, 33 Wis. 309; Bilk v. Hamilton, 130 Mo. 292.

Respondent having shown that the city had established and supplied with funds the accounts on which the warrants in suit were drawn, and the legal presumptions being in favor of the regularity of these acts, a prima facie case was made of the city's present liability to pay the warrants out of such accounts. The burden was thereby shifted upon the appellant to show any irregularity that would void such transfers. Hockaday v. Board of Co. Commissioners, 29 P. 291; State v. Lee, 37 A. 79; Nonfire v. U.S., supra; Metropolitan St. Ry. Co. v. Powell, 89 Ga. 601.

This burden was not assumed, and respondent's prima facie case results, and the accounts on which the warrants were drawn were shown to be regularly created and supplied with funds. Woodcock v. Calais, 68 Me. 244; Littell v. Fitch, 11 Mich. 524; Pease v. Cole, 53 Conn. 53; Hockaday v. Board of County Com., supra.

The appellant is liable to respondent out of its general fund, because the funds set apart for the payment of the warrants in suit were diverted to other purposes. Potter v. New Whatcom, 56 P. 394, 72 Am. St. Rep. 135; Valleau v. Newton Co., 72 Mo. 593; Same v. Same, 81 Mo. 591; City of Gladstone v. Thropp, 71 F. 348; Wilder v. City of New Orleans, 87 F. 843, 31 C. C. A. 249; Warner v. City of New Orleans, 167 U.S. 467, 42 L.Ed. 239, 17 S.Ct. 892.

When the warrants in suit were issued, the appellant undertook to make proper assessments, collect them, and see that the money was paid over to the warrant holder, within a reasonable time after the completion of the contract. A failure to discharge these duties rendered the City of Fargo liable out of its general fund to the holders of the warrant in suit. Commercial National Bk. v. Portland, 33 P. 532; Barber v. City of Harrisburg, 64 F. 283; Barber v. City of Denver, 72 F. 336; Wilder v. City of New Orleans, supra; Reilly v. City of Albany, 112 N.Y. 42; N. P. Lumber Co. v. East Portland, 12 P. 4; Cummings v. Mayor, 11 Paige 596; Buck v. City of Lockport, 6 Lans. 251; Mather v. City of San Francisco, 115 F. 37.

There is a distinction between warrants made payable by law out of a special fund only, and those which are evidences of a general corporate indebtedness, but which are to be charged to a particular corporate fund. A municipality is liable for improvements out of its general funds when the laws authorize a special assessment upon property benefited. The resort to the property benefited after the work is done, is for the reimbursement of the city. Clark v. Des Moines, 19 Ia. 221; Montague v. Horton, 12 Wis. 599; Kelley v. Mayor, 4 Hill (N.Y.) 263.

At the close of plaintiff's testimony defendant's counsel moved for a directed verdict. The motion was denied. Plaintiff's counsel then moved for a directed verdict, which motion was granted. Thereupon defendant's counsel moved for judgment notwithstanding the verdict, which motion was denied. Counsel did not ask for a new trial in connection with his motion non obstante. The right to a judgment non obstante is conferred by chapter 63, Laws of 1901.

This statute was adopted from Minnesota, and has had full construction there. The motion should be granted only when it clearly appears from the evidence that the cause of action or defense sought to be established, could not in point of substance constitute a legal cause of action or defense; and should be denied where it appears probable that the party has a good cause of action or defense, and the defects in the evidence are of such a character that they could be supplied upon another trial. Cruikshank v. St. Paul, etc., Ins. Co., 77 N.W. 958; Bragg v. Chicago, etc., Ry. Co., 83 N.W. 511; Kreatz v. St. Cloud School Dist., 81 N.W. 533; Richmire v. Andrews & Gage El. Co., 11 N.D. 453, 92 N.W. 819.

Appellant did not join to his motion for judgment a request for a new trial, and thereby waived his right to one, and this court will grant the motion or sustain the judgment. Bragg v. Chicago, etc., Ry. Co., 83 N.W. 511; Marquardt v. Hubner, 80 N.W. 617; Cruikshank v. St. Paul, etc., Ins. Co., 77 N.W. 958; St. Anthony Bank v. Graham, 69 N.W. 1077; Kernan v. St. P. City Ry. Co., 67 N.W. 71.

M. A. Hildreth, for appellant.

Benton, Lovell & Holt, for respondent.

OPINION

COCHRANE, J.

Action upon warrants (ten in number) drawn against city paving accounts by the city of Fargo. Plaintiff holds the warrants as transferree of the original paving contractors. The city of Fargo in July and August, 1895, entered into contracts for the paving of Front street and Northern Pacific avenue, in said city. Each contract provided that the payment should be by city warrants issued in behalf of the contract, to be accepted at par value. The warrants in suit, drawn under the Front street contract, directed each its payment "out of Front street paving funds in the treasury not otherwise appropriated for account of contract paving Front street." The warrant issued against the Northern Pacific avenue fund was in the same form, except that the name of the avenue is substituted for that of Front street. These warrants were issued and delivered in fulfillment of the contracts, and on October 9, 1895, were severally presented to the city treasurer for payment, registered by him, and indorsed, "Not paid for want of funds," and they are still unpaid. In pursuance of its duty under these contracts, the proper officers of appellant opened two accounts on its books, known as "Front Street Paving Account" and "Northern Pacific Avenue Paving Account," respectively. It is admitted that special assessments were made to pay for these improvements, that all proceedings required by statute were duly and regularly taken, and that the assessments were from time to time collected. Delinquent assessments were certified to the proper authorities for collection, and collections made. $ 24,327.40 was credited by the...