Travelers' Ins. Co. v. City of Denver

18 P. 556, 11 Colo. 434
CourtSupreme Court of Colorado
DecidedApril 15, 1888
StatusPublished
Cited by7 cases

This text of 18 P. 556 (Travelers' Ins. Co. v. City of Denver) is published on Counsel Stack Legal Research, covering Supreme Court of Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Travelers' Ins. Co. v. City of Denver, 18 P. 556, 11 Colo. 434 (Colo. 1888).

Opinion

Rising, C.

Counsel for defendant in error, in their argument, urge three grounds in support of the ruling of the court below: (1) That the complaint contains no allegations showing any consideration for the warrants sued on; (2) that there is no allegation in the complaint showing that there ever was or is any money in the treasury of defendant to the credit of the fund on which the warrants are drawn, sufficient to pay the same, or either of them; (3) that an action against defendant, on such city warrants, cannot be maintained; that plaintiff’s remedy is by mandamus against the city treasurer.

The contention of defendant in error is that the warrants sued bn are not negotiable instruments. We think these warrants are made negotiable by the provisions of sections 3-5, chapter 9, General Statutes. It is provided by section 3 that instruments of writing whereby one person acknowledges any sum to be due to any other person shall be taken to be due and payable to whom the said instrument in writing is made; by section 4 such instrument in writing is made assignable by indorsement of the payee thereon, in the same manner as bills of exchange; and by section 5 the assignee of such instrument in writing may maintain an action thereon in his own [438]*438name, which he could also do under the provisions of the code. These provisions of our statute were adopted in this state from the statutes of Illinois, in which state they have been construed to make a county order a negotiable instrument, in Garvin v. Wiswell, 83 Ill. 215; and county warrants have been held to be negotiable, in this state, in People v. Hall, 8 Colo. 485, 496. For instances in which instruments in writing have, under these provisions, been held to be negotiable instruments, see Lee v. Balcom, 9 Colo. 216; Stewart v. Smith, 28 Ill. 397; Archer v. Claflin, 31 Ill. 306-315; Petition v. Lorden, 86 Ill. 361.

The second ground urged by defendant in error in support of the ruling of the court in sustaining the demurrer to the complaint goes to the main question in the case. Counsel for defendant in error contend that the warrants set out in the complaint are, by the express terms thereof, drawn on a special fund, and that, being so drawn, the complaint does not state a cause of action, in that it is not alleged therein that there is money in said special fund with which to pay the warrants sued on; while counsel for plaintiff in error contend that the warrants are drawn on the general revenue of the city, and are payable out of the same, and that, being so drawn, it was not necessary for the plaintiff to allege, in its complaint, that there was money in the general fund of the city with which to pay the warrants. It seems to be well settled that, in an action upon warrants drawn on a special fund, it is necessary for the plaintiff to allege that there is money in that fund to pay the same. Reeve v. City of Oshkosh, 33 Wis. 477; Campbell v. Polk Co. 49 Mo. 214; Board v. Mason, 9 Ind. 97; 1 Dill. Mun. Corp. § 505; 1 Daniel, Neg. Inst. § 433. The warrants contain a direction to the treasurer of the city to pay “out of the 20th St. sewer fund,” to the order of Joseph Williams, the sums in said warrants named. It is claimed by plaintiff in error that this direction to pay “out of [439]*439the 20th St. sewer fund ” must be considered as descriptive of the purpose for which the warrants were drawn. We do not think the claim well founded. The purpose for which the warrants were drawn is stated therein to be “on account of the 20th St. sewer cont.,” and this statement is so clearly expressed-that no doubt can arise in relation to the purpose for which the warrants were drawn. It is also clear that, upon the face of the warrants, the direction is to make payment out of a particular fund. To overcome this apparent special-fund feature of the warrants, counsel for plaintiff in error contend that the city is primarily liable for the indebtedness evidenced by such warrants, and that, the city being liable: for the payment of such indebtedness, whether there is or is not such special fund, the warrants must be held to. be drawn on the general revenue, notwithstanding the direction made. To properly understand the force and effect of the clause in the warrants relating to the fund out of which payment is to be made, we must look to the provisions of the charter authorizing the' city to draw, warrants. It is provided, in section 62 of the charter, that “all warrants drawn upon the treasurer shall be signed by the mayor, and countersigned by the city clerk, and shall state -to whom payable, and from what fund payable, and for what purpose.” These requirements as to what the warrants shall state are mandatory, and a warrant which does not comply with these requirements in its statements does not create any liability against the city, and is not evidence of a debt against it. Reeve v. City of Oshkosh, 33 Wis. 477, 480; Bayerque v. San Francisco, 1 McAll. 175, 176; Argenti v. San Francisco, 16 Cal. 256-276. From these provisions of the charter it will be seen that the form of the warrants is in compliance with the requirements of the charter. It being the duty of the officer who drew the warrants to direct therein from what fund the same shall be paid, the presumption arises that the officer did his duty in that re:: [440]*440gard, and made them payable out of the proper fund. The presumption is that public officers do as the law and their duty requires them. Lawson, Pres. Ev. 53-. But it is contended by counsel for plaintiff in error that there is no provision of the charter which creates a special fund of any kind., and no provision which authorizes the city council to create a special fund, and that, therefore, the presumption that the officer properly performed his duty is overcome. We do not think that the position of counsel that the charter does not authorize the creation of a special fund is well taken. A special fund is nothing more nor less than a particular fund,- a fund that is specially provided for a particular purpose. Section 60 of the charter expressly provides that the city council sháll pass an annual appropriation ordinance, appropriating certain definite sums of money to defray the expenses incident to each department of the city government. By this provision of the charter the city council is required to create a special fund for each department of the city government. It may be urged that this provision of the charter did not authorize the council to create the particular fund named in the warrants, but we think that the power is inherent in the city authorities to create a special fund for the payment of any indebtedness which they are authorized to contract, when the creation of such fund does not interfere with any other fund created under the provisions of the charter, and that they may, by contract with the creditor, provide that the payment of such indebtedness shall be out of a special fund to be created for that purpose. Assuming that the city authorities had the power to contract the indebtedness evidenced by the warrants, it follows that they had power to contract for the manner of its payment, and the presumption arises that the officer drawing the warrants did his duty in that regard, and drew them in accordance with the law and his duty, and in accordance with the terms of the contract under which such [441]*441indebtedness was incurred.

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Bluebook (online)
18 P. 556, 11 Colo. 434, Counsel Stack Legal Research, https://law.counselstack.com/opinion/travelers-ins-co-v-city-of-denver-colo-1888.