Quaker City National Bank v. City of Tacoma
Quaker City National Bank v. City of Tacoma
Opinion of the Court
The opinion of the court was delivered hy
The appellant is the Folder 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 De
“Sec. 2. That out of said fund shall he 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 T. W. McCauley and his sureties, and from the banks and their sureties in which said Boggs and Mc-Cauley 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
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 so 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. New Whatcom, 20 Wash. 589 (56 Pac. 394, 72 Am. St. Rep. 135); North Western Lumber Co. v. Aberdeen, 22 Wash. 404 (60 Pac. 1115) ; Potter v. New Whatcom, 25 Wash. 207 (65 Pac. 197) ; Tacoma Bituminous Paving Co. v. Sternberg, 26 Wash. 84 (66 Pac. 121). But it is plain that a city, by misappropriating moneys belonging to a special fund, does not render itself liable to pay the warrants drawn upon that fund, as if they were warrants drawn upon its general fund. In other words, the act of misappropriation does not make such special fund warrants general fund warrants of the city. The city’s liability arises from its wrongful act, and is measured by the amount of the fund misappropriated. The remedy of an injured party for a wrong of this kind would ordinarily he by an action sounding in damages for the injury suffered, judgment for which, when recovered, would he satisfied by the issuance to the judgment creditor of a general fund warrant in the amount of the judgment, to be paid by the city’s treasurer, in the order of its issuance, out of moneys coming into its general fund. Unless, therefore, some special fact is alleged, in addition to the fact of misappropriation, showing a liability to pay out of its general fund,— such, for example, as the appropriation of the money from
The remaining question is, are the facts alleged sufficient to entitle the appellant to recover out of the special fund created by the ordinance of September 21, 1900 ? It is not to be doubted that the city had poAver in the first instance, provided, of course, it did not exceed its constitutional limitation of indebtedness, to provide for the payment of the cost of improvement Avhich gave rise to the issuance of the appellant’s warrant out of its general fund, either in whole or in part. It could also have legally bound itself to pay any deficiency in the cost of the improvement remaining unpaid after the sjiecial fund created should be exhausted. This much is apparently conceded by the learned counsel for the city. If the city could do this prior to the making of the improvement, on wliat
The warrant is not barred from payment out of this fund by the statute of limitation. It is a valid, existing warrant against the fund upon which it was drawn, and belongs to the very class the city intended should be paid out of the fund created by the ordinance.
The judgment is reversed and the cause remanded, with permission to the respondents to answer to the merits of the application.
Reavis, C. J., and White, Dunbar, Mount and Anders, JJ., concur.
Reference
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- Quaker City National Bank of Philadelphia v. City of Tacoma
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- MUNICIPAL CORPORATIONS- SPECIAL FUND WARRANTS-ORDER OF PAYMENT — MISAPPROPRIATION OF FUND-LIABILITY. The payment by tbe city of warrants drawn on a special fund, wbicb bad been issued subsequent in time to other warrants on tbe same fund, is sucb a misappropriation of tbe moneys belonging to sucb special fund as to render tbe city liable, where prior warrants are left unpaid by reason of tbe exhaustion of sucb special fund. SAME-MANDAMUS. Where tbe moneys belonging to a special fund have been misappropriated by, tbe city, mandamus will not lie to compel the city to pay warrants on sucb special fund out of tbe city’s general fund, but tbe remedy of tbe party injured by sucb misappropriation would be by an action sounding in tort for tbe injury suffered, judgment for wbicb would be satisfied by tbe issuance of a general fund warrant to be paid in-the order of its issuance out of moneys coming into tbe general fund. SAME-LIMITATION OF ACTIONS. Under Bal. Code, § 4800, subd. 2, wbicb provides that an action for an injury to tbe person or rights of another must be commenced within three years after tbe cause of action accrues, a complaint wbicb alleges tbe misappropriation by a city of tbe moneys of a special fund at a date more than three years prior to the commencement of tbe ac„mn is demurrable on tbe ground that it bad not been instituted within tbe time limited by law. SAME-DEFICIENCY IN SPECIAL FUND-POWER OF CITY TO REMEDY. Where a city has power uo pay tbe cost of a special street improvement, in whole or in part, out of its general fund, and also power to bind itself to pay any deficiency remaining after tbe exhaustion of tbe special fund, its promise to do so after a deficiency is found to exist is valid under tbe rule governing tbe ratification of contracts, whereby tbe power to make the contract forms tbe basis of liability and tbe performance of tbe act furnishes the consideration. SAME-LIMITATIONS. Although an action by a warrant-holder against a city ror misappropriation of moneys of a special fund may have been barred by the statute of limitations, yet such bar would not operate to defeat recovery on his warrant out of the special fund on which it was drawn, nor out of a fund substituted therefor.