People ex rel. Hurd v. Johnson , 100 Ill. 537 ( 1881 )

Mr. Justice Mulkey

delivered the opinion of the Court:

This is an appeal by the People, on the relation of Harvey B. Hurd, from a judgment of the Appellate Court for the First District, reversing a judgment of the circuit court of Cook county, awarding a peremptory mandamus commanding the county treasurer of Cook county to pay to the relator, Harvey B. Hurd, $250, the amount of a county order issued by Cook county to John Comiskey, on account of his services as clerk of the county board.

The order was in the usual form, bearing date June 1,1877, signed by the county clerk, and countersigned and registered by the treasurer. On the day of its issue, Comiskey, the payee, indorsed it in blank, and while on his way to the treasurer’s office to obtain payment casually lost it, and it subsequently came into the hands of the relator in the regular course of business, he having purchased the same in good faith at its full market value, without any notice of the defective title. On the 25th of the same month, on proof of the loss of the order by Comiskey, a duplicate order was issued to him by order of the county board, which was paid by the county treasurer in August following, and before the commencement of the present proceeding, the county neither taking nor requiring any indemnity from Comiskey on account of the lost order.

Two questions are presented for our determination by the foregoing state of facts:

First—Assuming the county is liable to the relator in some form of action, is mandamus the proper remedy ?

Second—Is the county, under the facts stated, liable to the relator in any form of action ?

In the view we have taken of this case, both these questions must be answered in the negative.

It is to be remarked, in the first place, that all the duties of a statutory disbursing officer, such as county treasurer, are generally, if not universally, specifically defined by statute, so that ordinarily, where no discretion is given him- in the discharge of those duties, there can be no just ground for controversy as to when he will be bound to honor orders drawn on him, and when he will not. Hence, as a general rule, mandamus will lie to compel a county treasurer, or other disbursing officer, to pay an order legally drawn upon funds in his hands, subject to the payment of such order. Nor would the rule, in this respect, be changed by reason of the officer having, through inadvertence or misapprehension of duty, made payment to another who had no claim upon, or pretence of right to, the fund thus paid out. The People ex rel. v. Smith and Miner, 43 Ill. 219. But where, in such case, by reason of a complication of extraneous circumstances not specifically provided for by the statute, a well-founded doubt arises, either as to the right of the applicant to receive the fund, or the duty of the officer to pay it out, mandamus is not the proper remedy. The right in such case being doubtful, the claimant must resort to some other appropriate remedy to determine it. The People ex rel. v. Dulaney et al. 96 Ill. 503; The People ex rel. v. Klokke et al. 92 id. 134.

While the remedy by mandamus rests largely in the discretion of the courts, yet the rule is uniform and inflexible that .the writ will not be granted unless the relator’s right to it is clearly established. People ex rel. v. Davis et al. 93 Ill. 133.

It is difficult to perceive upon what theory it can be seriously contended that the relator has shown a clear right to the writ in this case. The county was indebted to Comiskey, on account of his services as clerk, in the sum of $250. The drawing of the order on the county treasurer for that sum did not operate as a payment, or change the character of the indebtedness. The order was given simply because it was an essential part of the plan or system which the law has provided for the disbursement of the county funds and the payment of its indebtedness. By means of these orders any discrepancies between the allowances made, by the county board and the account of the treasurer can be easily detected. They serve as vouchers in the hands of the treasurer, and this was doubtless the primary object of the legislature in requiring them to be issued. This being so, the mere loss of the order in question, although indorsed in blank, could not have affected the right of Comiskey to payment for his services. It was, therefore, entirely proper for the county board to order the county clerk to issue a duplicate order for the amount, so as to provide the treasurer with the appropriate voucher on payment. This was done. The debt having been paid upon the surrender of the duplicate order, the original order became inoperative and void.

It is claimed, however, that the order in question is to be regarded as negotiable paper, and that the relator having-purchased it at its full market value, in the regular course of business, without notice of any infirmity in it, the county is bound to protect him by paying the amount of the order again; and this brings us to the second question presented for our determination, namely: Is the county liable, under the facts of this case, in any form of action ?

If any one proposition can be regarded as clearly and definitely settled beyond all question, it is that the officers or official agents of a county or other municipal corporation have no power, without express legislation for that purpose, to issue commercial paper, and thereby impose upon the municipality the duties and liabilities incident to such paper. And we think it equally clear, as shown by the whole course of decisions in this State, that the statute authorizing the issuing of county orders was not intended to, nor does it, confer any such power, nor do those orders, when issued, possess the essential qualities and attributes of commercial paper. As soon as countersigned and registered by the treasurer they are at once due, without presentment for or demand of payment, and hence, whether assignable or not, they are always open to any defence which would be available if the suit were brought in the name of the original payee. Indeed, it is admitted by counsel in this case that the true state of the account between the payee of the order and the county may always be shown by way of defence, even as against an innocent holder. This is, in effect, conceding they are not eommercial paper, for, if commercial paper, such a defence would not be available as against an innocent holder. In all cases the county has to deal with the indebtedness which the order represents, and it can not be made liable twice on account of the same indebtedness. Should the officer pay the claim to an unauthorized person not in possession of the order, it would not operate as a discharge of the debt, and the officer would be personally liable for a misappropriation of the fund. The creditor of the county is not to be deprived of his claim because he has accidentally lost the order which represents it, provided he notifies the county of the loss before payment to the holder of the order, who must necessarily derive his title through a polluted source. Where there has been no actual transfer or payment of the indebtedness before the proper authorities of the county are notified of the loss of the order, the creditor will be entitled to payment notwithstanding such loss, and the holder of such lost order will be remediless, so far as the county is concerned. His only remedy would be against the party from whom he got it; and there would be no hardship in this, since every one purchasing such paper is conclusively presumed to know that by his purchase he only acquires the rights of his assignor, whatever they may be, and whether there has been a written assignment or a mere transfer by delivery, makes no difference in this respect.

We regard the rule well settled, by considerations of public policy as well as by a decided preponderance of authority, that warrants or orders drawn by one municipal officer upon another, in the disbursement of the funds of the municipality and payment of its indebtedness, are not to be regarded as negotiable or commercial paper, cutting off equities against the corporation. As we have already seen, the official agents of these municipalities have no implied power to execute such paper, and to clothe these warrants or orders with the qualities and attributes of commercial securities, would be to give them a character foreign to the object and purposes of their creation. Hewitt v. Normal School District, 94 Ill. 528.

While these orders, if payable at a future day, would be in form inland bills of exchange, yet; there is, in fact, a want of the usual parties essential to such paper. In the case of a bill of exchange, we have the drawer, payee and drawee, the latter after . acceptance being called the acceptor. These parties, upon tlm execution of the paper, assume certain specific duties and obligations towards each other. The instrument is a written contract between them. In the case of a municipal warrant or order, nothing, in fact, of this kind occurs. The officers signing the paper assume no personal liability upon it. If never paid, the officer drawing it could not successfully be sued upon it, nor could the treasurer be sued for non-payment, except where he refuses after the necessary funds have been provided for that purpose, and then not on the instrument itself. Indeed, neither the clerk nor the treasurer is a party to a county order. The county, in contemplation of law, is both drawer and drawee. That is, the county, through its official agent, the clerk, draws an order on itself. No duty or obligation, therefore, is created between the apparent drawer' and drawee upon the making of such an order as is usually created in the case of a bill of exchange, for the drawer and drawee are the same party, and, strictly speaking, one can not owe a legal duty to himself. Moreover, this instrument was payable out of a particular fund, namely, such moneys as might happen to be in the treasury not otherwise appropriated, while it is essential to commercial paper that it be payable absolutely, and at all events. This of itself shows that such orders or warrants are not to be regarded as commercial paper. These considerations, when taken in connection with the manifest objects and purposes of the legislature in providing for such orders, as heretofore stated, clearly show they were not intended to be included in that class of instruments provided for in chapter 98 of the Revised Statutes, entitled “Negotiable Instruments.”

In addition to this, it is manifest, from even a cursory examination of that chapter, that many of its provisions are wholly inapplicable to instruments of the character we are considering. The case of Garvin v. Wiswell, 83 Ill. 215, is cited as holding a contrary doctrine. The instrument in that case was not, like the one in the present, an ordinary county order, issued under the general law relating to such instruments. On the contrary, it was not only in form a negotiable, security, but was intended by the county authorities, at the time of its issue, to be put upon the market and sold as such. And while there was no authority to issue it at the time it was done, yet a few days afterwards the legislature passed a special act ratifying the action of the board of supervisors in issuing it and others of a similar character, whereby the same were rendered valid and binding on the county. (Vol. 1, Pr. Laws, 1865.) The effect of this act was equivalent to a previous authority to issue the instrument, and gave to it, as was originally intended, all the attributes of commercial paper. That the legislature has ample power to authorize counties or other municipalities to issue negotiable securities is not to be questioned, yet, without such special legislative authority, they have no power to do so, and there is no pretence that the order in this case was issued for .any such purpose, or was authorized by any special act of the legislature.

Nevertheless, in many of the States, including our own, it has become quite common in business transactions to transfer these instruments by written indorsements, in the same manner as if commercial paper, and this usage or custom prevails to such an extent that many courts of the highest respectability have recognized the validity of such assignments, for the purpose, simply, of enabling the assignee to sue in his own name, saving to the municipality all equities and defences which would be available if the suit were brought in the name of the original payee.

We perceive no substantial objections to this doctrine, and it is believed that public convenience will be promoted by its recognition. Indeed, the principle has already been recognized by previous decisions of this court: Newell v. School Directors, 68 Ill. 514; Turner v. P. and S. R. R. Co. 95 id. 134.

The foregoing general views are believed to be fully sustained by the following authorities: 1 Daniel’s Negotiable Instruments, sec. 427; Dillon on Municipal Corporations, sec. 406, (1st ed.); Mayor v. Ray, 10 Wall. 468; Dana v. San Francisco, 19 Cal. 491; People v. Eldorado County, 11 id. 175; Clark v. Polk County, 19 Iowa, 248; Clark v. City of DesMoines, id. 199; Hyde v. Franklin County, 27 Vt. 185.

It follows, from what we have already said, that an action for the amount of the order in question could not, after, payment to Comiskey, have been maintained in his name against the county, either for his own use or that of the relator, and hence the county, under the facts of this case, is not, as we have already stated, liable to the relator in any form of action.

The judgment of the Appellate Court will therefore be affirmed.

Judgment affirmed.

Walker, J., dissenting.