Case Name: North Western Lumber Company, Appellant, v. City of Aberdeen, Respondent
Court: Washington Supreme Court
Jurisdiction: Washington
Decision Date: 1900-04-26
Citations: 22 Wash. 404
Docket Number: No. 2920
Parties: North Western Lumber Company, Appellant, v. City of Aberdeen, Respondent.
Judges: 
Reporter: Washington Reports
Volume: 22
Pages: 404–406

Head Matter:
[No. 2920.
Decided April 26, 1900.]
North Western Lumber Company, Appellant, v. City of Aberdeen, Respondent.
MUNICIPAL CORPORATIONS — WARRANTS-ORDER OF PAYMENT — LIABILITY FOR MISAPPLICATION OF FUNDS.
Where a city collects money from special assessments on the property benefited, made to cover the cost of a street improvement, and from such fund pays certain warrants, while prior-warrants drawn against the fund remain unpaid, such action constitutes a damage to the holder of the prior warrants, for which the city is liable.
SAME — LIABILITY FOR FAILURE TO COLLECT SPECIAL ASSESSMENTS.
A city cannot be held liable generally upon warrants drawn upon a special fund for the payment of. a street improvement, even if the remedy of a street assessment proceeding is no longer available.
Appeal from Superior Court, Chehalis County. — Hon. Charles W. Hodgdon, Judge.
Reversed.
Sidney Moor Heath, for appellant.
J. C. Cross, for respondent.

Opinion:
The opinion of the court was delivered by
Reavis, J.
Plaintiff in its complaint set forth three causes of action, the first being that in December, 1890, the defendant city entered into a contract with one Smith, and under the terms of the agreement Smith was to plank and improve Market street, and receive payment therefor in warrants drawn to his order, payable from a special assessment to be collected from an assessment district for which the improvement was made, and that the city agreed without neglect to collect the warrants, and without delay to pay the same; that the warrants were duly issued and delivered, and for value assigned to plaintiff, and were presented and indorsed as interest bearing; that the de fendant city collected a large amount from the assessment district, and, while such funds were in the city treasury and three of said warrants held hy plaintiff (Wo. 399, for $350, Wo. 400, for $350, and Wo. 401, for $355.12) were due and payable as aforesaid in the order of their issuance, the city, instead of paying plaintiff's warrants in the order of their issuance, paid other warrants issued against the same fund and numbered subsequently, to-wit, warrant Wo. 402, for $38.80, Wo. 403, for $230.71, and Wo. 404, for $215.40. But it is also stated that the principal of warrant Wo. 399, held by plaintiff, was paid, except interest thereon which was settled by the cancellation of warrant Wo. 399 and the issuance in lieu thereof of warrant Wo. 2582 for the amount of the interest accrued. Plaintiff alleges its damages upon this cause of action in the sum of $474.91, the aggregate of the amounts of the warrants paid numbered subsequently to those held by plaintiff. The other two causes of action stated in the complaint were upon warrants issued against special assessment funds by the city. The allegations were that the city had failed and neglected to collect the assessments; that demand had been made for payment from the city of the amount due on the warrants, and they were unpaid. A general demurrer was interposed to the complaint on the ground that it did not state facts sufficient to constitute a cause of action, and was sustained by the superior court. Plaintiff, standing upon its complaint, brings the cause here.
1. It has been ruled frequently that warrants must he paid in the order of their issue and number. It appears from the complaint that the defendant city violated this rule, and paid the warrants issued subsequently to those of plaintiff from the fund properly applicable to plaintiff's warrants. Such diversion of the fund was to the damage of plaintiff. Eidemiller v. Tacoma, 14 Wash. 376 (44 Pac. 877).
In Potter v. New Whatcom, 20 Wash. 589 (56 Pac. 394, 72 Am. St. Rep. 135), it was said: "As the monéy has been collected and misapplied by the city, it can be recovered by the warrant holder."
2. The causes of action stated upon the other warrants held by plaintiff fall within the rule announced in the case of German-American Savings Bank v. Spokane, 17 Wash. 315 (49 Pac. 542, 38 L. R. A. 259), and reaffirmed in the case of Wilson v. Aberdeen, 19 Wash. 89 (52 Pac. 524), where it was adjudged that a city cannot be held liable generally upon warrants drawn upon a special fund for the payment of a street improvement, even if the remedy of a street assessment proceeding is no longer available.
The cause is reversed, with direction to overrule the demurrer as to the first cause of action, and for further proceedings in accordance herewith.
Gordon, O. J., and Fullerton, J., concur.
Dunbar, J. — I think the plaintiff should recover in all the causes of action.