But other authorities, following the analogies of private corporations, regard such orders like bills of exchange drawn by a party upon himself, and which may be treated either as accepted bills or as promissory notes; and hold, therefore, that the corporation is bound absolutely for the debt without either presentment or notice.'

§ 431. Suit on original indebtedness.—When the warrant or order has been refused payment, the creditor may sue upon the original indebtedness of the corporation. Where there was no express or implied power in the officer who executed it to issue the warrant, the plaintiff can not make it even the prima facie ground of recovery, and must resort to the original consideration ;' but when issued by an officer having a general power to issue warrants, it will be presumed to be upon a consideration, and if there be any defence, it must be pleaded and proved by the defendant."

$ 432. It is not incumbent upon a creditor to take a town order in discharge of a debt due him, although it is the usage of the town to settle its indebtedness by giving an order of its selectmen on the treasurer, similar to that offered.5 But if he takes such order, he can not recover the amount of the debt, as it seems, without producing it. And if once paid, it can not be the subject of recovery

the payee of an order will give himself the trouble to do his duty and request payment of the money due him according to the terms of it. We have no reason to believe but that the contents of the order would have been promptly paid on application at the treasury. Justice, as well as law, are against the plaintiffs according to the facts before us." Pease v. Cornish, 19 Me., 193; Dalrymple v. Whittingham, 26 Vt., 346; see Kelly v. Mayor of Brooklyn, 4 Hill, 265.

* Steel v. Davis County, 2 G. Greene (Iowa), 469.

Short v. City of New Orleans, 4 La. Ann., 281; Goldschmidt v. The same, 5 La. Ann., 436.

• Allison v. Juniata County, 50 Penn. St., 353; see Dana v. San Francisco, 19

Cal., 491.

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* Comm’rs of Floyd County v. Day, 19 Ind., 451.

Benson v. Carmel, 8 Greenl., 110; Willey v. Greenfield, 30 Me., 452; Dillon on Municipal Corporations, ist ed., p. 398, § 410.

• Sweet v. Carver County, 16 Minn., 107 ; Crawford County v. Wilson, 7 Ark.

even by a bona fide holder, at least where it is not deemed a negotiable instrument."

When such warrants or orders are issued as vouchers, they do not bear interest after demand and refusal to pay ;' but some of the authorities which regard them as negotia ble instruments, hold that interest is recoverable after dis honor.3

$ 433. Payable out of particular fund.—Where a warrant or order is made payable out of a particular fund, it creates no general charge against the corporation, but only against the fund which is designated. It has been so held where the order contained the memorandum, “and charge the same to account of Union avenue ";5 and where it was payable out of “the road and canal fund.” 6

But if the memorandum merely indicate the consideration, or the source of reimbursement, it would be different.. So held where there was written, “it being his proportionate part of the surplus revenue fund”;? so where it ran, “for award No. 7, and charge to Bedford Road Assessment”; so where it was payable "out of any funds belonging to the

" city not before specially appropriated.”'

$ 434. Suit by transferee.-Whether or not the indorsee or assignee of a corporation warrant or order drawn by one officer upon another, can sue the county or city in his own name, is another question which has frequently arisen. Where such papers are deemed negotiable, an indorsee or transferee may of course sue upon them as upon any other negotiable instrument. 10 But where they are regarded as

Chemung Canal Bank v. Supervisors, 5 Den., 517.

* Allison v. Juniata County, 59 Penn. St., 353 (1865); Dyer v. Covington Township, 19 Penn. St., 200 (1852).

*Com’rs of Leavenworth v. Keller, 6 Kans., 518. *Lake v. Trustees, 4 Den., 520 ; Kingsberry v. Pettis County, 48 Mo., 207. *Lake v. Trustees, supra.

• Kingsberry v. Pettis County, supra. * Pease v. Cornish, 19 Me., 191.

Kelly v. Mayor, 4 Hill, 263. • Bull v. Sims, 23 N. Y., 570.

Kelly v. Mayor, 4 Hill, 263; Dalrymple v. Town of Whittingham, 26 Vt.,

7

mere vouchers drawn by one officer upon another for convenience in disbursing funds, the contrary view has generally prevailed—that the transferee can not sue upon them in his own name. The views of the United States Supreme

* Court on this question have been already referred to. It must in general be solved by the law of the Forum.

$ 435. By some authorities it is considered that though town or country orders payable to bearer, or payable to order and indorsed, are not commercial paper in the hands of bona fide indorsees or transferees for value, so as to exclude evidence touching the legality of their inception, or so as to cut out defences which would be good against the payee; yet they may be sued upon by the indorsee or transferee in his own name, in like manner as the assignee of a non-negotiable instrument.3

33.

1

345 (but see Hyde v. County of Franklin, below); Crawford County v. Wilson, 7 Ark. (2 English), 219; Commissioners of Leavenworth v. Keller, 6 Kans., 510; see Great Falls Bank v. Farmington, 41 N. H.,

· Hyde v. County of Franklin, 27 Vt., 185; Allison v. Juniata County, 50 Penn. St., 353, Thompson, J.: “It was distinctly said in that case (Dyer v. Covington Township, 7 Harr. [19 Penn. St.], 200, that an action does not lie on such paper, and in this I entirely concur. It is neither a bill, note, check, nor contract, nor is it a satisfaction of the original indebtedness, and the suit should ordinarily be on that." See Smith v. Cheshire, 13 Gray, 318.

? See ante, $ 427.

Emery v. Mariaville, 56 Me., 316; Sturtevant v. Liberty, 46 Me., 459; Clark v. Polk County, 19 Iowa, 248; Andover v. Grafton, 7 N. 303, overruled by Great Falls Bank v. Farmington, 41 N. H., 33. This view is taken by Judge Dillon. Dillon on Municipal Corporations, ist ed., p. 394, § 406. See ante, $$ 420, 427.

2

CHAPTER XVI.

THE FEDERAL AND STATE GOVERNMENTS AS PARTIES TO

NEGOTIABLE INSTRUMENTS.

SECTION I.

GENERAL PRINCIPLES AS TO GOVERNMENTAL LIABILITY, AND

LIABILITY OF AGENTS.

a

§ 436. There is no doubt that when an officer of the government, Federal or State, who is authorized to bind the government as drawer, maker, or acceptor of a negotiable instrument, draws or accepts a bill, or makes a note in behalf of the United States, or the State which he represents, its validity can not be questioned when it has passed into the hands of a bona fide holder for value, without notice of any defect. The government would then be bound by its negotiable paper just as an individual. This doctrine was laid down by the United States Supreme Court in a case where the Bank of the Metropolis, being sued for a balance due the United States, pleaded as a set-off a draft drawn by Edwin Porter on Richard C. Mason, treasurer of the post-office department, at ninety days, and accepted by him as treasurer; and also four drafts, at ninety days, drawn by James Reeside on Amos Kendall, Postmaster-General, and " accepted on condition that his contracts be complied with.” The right of the officers to accept, on behalf of the government, was not questioned, and the court held them valid, declaring that : “When the United States, by its authorized officer, becomes a party to a negotiable paper, they have all the rights, and incur all the responsibilities, of indi

a

viduals who are parties to such instruments"; and that all the bank had to look to “was the genuineness of the acceptance and the authority of the officer to give it."1 At the present time there seems to be no officer of the Federal government who has authority to bind it as a party to a bill or note. The government being affected by the same rules as affect individuals in commercial transactions, will be barred from recovery of money paid on a forged indorsement, when it delays too long to give notice.3

$ 437. In the case of The Floyd Acceptances, 7 Wall., 667, before the United States Supreme Court, the authority of government officers to draw or accept bills was discussed in a suit upon the following instrument :

Washington, November 28, 1859. $5,000.

Ten months after date, for value received, pay to our own order, at the Bank of the Republic, New York city, five thousand dollars, and charge to account of our contract for supplies for the army in Utah.

RUSSELL, MAJORS & WADDELL. Hon. J. B. FLOYD, Secretary of War.

[Indorsement.) RUSSELL, MAJORS & WADDELL.

[Acceptance.)
War Department, November 28, 1859.

Accepted:
JOHN B. FLOYD,

Secretary of War. Suit was brought by a bona fide indorsee for value, but the court held that he could not recover, although it was proved that the army in Utah was in imminent danger from cold and starvation at the time when the secretary accepted the bill in order to secure supplies to save it, on the ground that there was no usage or practice by which the Secretary of War was authorized to accept such bills in behalf of the United States; and that although it was then and had been

United States v. Bank of Metropolis, 15 Pet., 377. See this case explained in The Floyd Acceptances, 7 Wall., 666.

· The Floyd Acceptances, 7 Wall., 666. • U. S. v. Central N B., 6 Fed. N., 134.