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BREWER v. OTOE COUNTY,

The defendant in error brought his action in the court below, to recover a judgment upon several warrants drawn by the county commissioners of Otoe county upon its treasurer, at various times between the 24th day of September, 1858, and the 5th day of January, 1863. To the petition the county filed a general demurrer which was overruled, but no exception taken thereto. Thereupon an answer was filed admitting the drawing of the warrants, but denying the liability of the county, for the reason that they were all rendered null and void by the provisions of the act of the late Territorial legislature, entitled "An act to provide for the funding of the warrants of Otoe county, approved February 10, 1865."

To all except the first three causes of action there was interposed the further defence of the statute of limitations, viz: that they did not accrue to the plaintiff within five years next before the commencement of the suit.

To the answer, Brewer filed a general demurrer which was sustained, and judgment thereupon rendered in his favor for the amount due on the several warrants sued on, to which ruling and judgment the defendant excepted.

Two errors are relied on to reverse this judgment.

1. That the court erred in sustaining the demurrer to the answer, and

2. In rendering judgment for the plaintiff when it should have been in favor of the defendant.

The questions presented are very important, involving as they do the constitutionality of the act of the legislature before referred to.

It is unnecessary here to decide whether the legislature, in an act authorizing a county to fund its indebtedness, cau require the holders of its warrants, which are due, to sur: render them und receive in lieu thereof its bonds payable several years thereafter. That the legislature is invested with any such power may well be doubted. But the act

BREWER V. OTOE COUNTY.

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before us does not stop here. It, in direct terms, provides that these warrants, which by the law of the land in force when they were drawn, bore interest at the rate of ten per cent per annum shall be exchanged, without the consent of the owner, for bonds payable on the first day of January, 1873, with interest at the rate of seven per cent per annum.

The effect of this would be to set aside and wholly annul a solemn contract which the county had made with one who had given it credit, and without his knowledge or assent to substitute another not only radically different in its terms but greatly to his prejudice.

Section 2 of the act provides that no bond shall be issued for a less sum than twenty-five dollars, so that the holder of a warrant for less than that amount would pot have been entitled to a bond therefor, and yet by the sixth section of the act it is provided that “all warrants issued prior to January 1, 1864, which are not presented and bonded prior to December 1, 1865, shall be forever barred."

I must confess that if all this may be done, I can see no limit to the exercise of arbitrary, despotic power by the legislature over personal contracts. I cannot give my assent to so dangerous a proposition, and must deny its authority. I do not feel at liberty to concede to the legislature any such power, and am forced to the conclusion that

, the act in question violates one of the provisions of the tenth section of the first article of the Constitution of the United States, as well as the twelfth section of the first article of the Constitution of Nebraska, and therefore must be declared and held to be wholly inoperative as to these warrants and to furnish no defence to a recovery thereon. The plaintiff

, then, was under no legal obligations to present his warrants for bonding, nor is the county, by reason of his failure to do so, released from its obligation to receive them in payment of county taxes, or whenever the necessary funds are in the treasury to pay them on presentation, just

BREWER 1. OTOE COUNTY.

the same as if this act had never been passed. It in no wise releases the county from the obligation it assumed when the commissioners issued these warrants.

This view of the case would enable the court to dispose of it without considering the question raised by the plea of the statute of limitations, but as this is fairly presented in the record and is relied on by counsel, I will give it a brief notice.

Section 10 of title 2 of the Code provides that “an action upon a specialty or any agreement, contract, or promise in writing, or foreign judgment, can only be brought within five years after the cause of action shall have accrued." This provision applies as well to actions where counties or other municipal corporations are parties as between private persons. The law recognizes no distinction in suitors, but is the same rule unto all.

But these warrants do not, nor was it the intention of the legislature that they should, fall within the operation of this act.

When a demand or claim against a county is presented to the commissioners for settlement, they hear the proofs and determine whether it is one which the county is bound to pay, and the amount due thereon. In this they act judicially, and, within the scope of the authority conferred upon them, their decision is a judgment binding upon the county. If they decide in favor of the claimant an order is drawn upon the treasurer for the amount, desig. nating the fund out of which it is to be paid. If there be money in the treasury belonging to the fund against which it is drawn, not otherwise appropriated, it is the duty of the treasurer to pay the warrant; but if there be none he must indorse upon it the fact of its presentation, and nonpayment for want of funds, and the holder must wait for his money until such time as it can be raised through the means which the legislature provides for the collection of

Nor can any action rightfully be brought on such

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BREWER V. OTOE COUNTY.

warrant until the fund is raised, or at least sufficient time has elapsed to enable the county to levy and collect it in the mode provided in the revenue laws.

That the legislature never intended that county warrants should be affected by the limitation act before referred to is evident, I think, from the whole course of legislation respecting them. As late as the 12th of February, 1866, it was enacted that “all debts heretofore incurred by the county commissioners of any county acting in good faith, and duly recorded at the time on their books, shall be deemed valid, and the county shall be held liable for the same." Chap. V, sec. 1, Rev. Stat.

Chapter IX, Section 1 provides that “all county orders heretofore drawn, or that may hereafter be drawn, by the proper authorities of any county, shall, after having been presented to the county treasurer and by him endorsed not paid for want of funds in the treasury, draw interest from said date at the rate of ten per cent per annum."

From these, as well as numerous other enactments of the legislature that might be cited, I have reached the conclusion that the plea of the statute of limitations cannot be successfully made against these warrants, and that when. ever it can be shown that the funds have been collected out of which they can be paid, or sufficient time has been given to do so in the mode pointed out in the statutes, their payment may be demanded, and, if refused, legally coerced.

It only remains now to determine whether the judgment of the court can be sustained, whether the facts set forth in the petition constitute a cause of action. It states that the several warrants were drawn upon the treasurer, payable out of any money in the treasury not otherwise appropriated. This must be considered as a provision for their payment out of any money belonging to the general fund then in the treasury or which should be afterwards collected. The treasurer had no authority to pay them out of the road,

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BREWER U OTOE COUNTY.

bridge or school funds, because they are drawn against neither.

It has been the constant practice, from the first settlement of our State, to anticipate both the general and special funds by drawing orders against them in advance of their collection. This practice has been repeatedly recognized by the legislature, especially in section two, chapter five of the Revised Statutes, which provides that “it shall not be lawful for any board of county commissioners to issue any warrant or order, on the county treasurer, for

any sum or sums of money exceeding in the aggregate the amount said board have levied by tax for the current year."

Whoever deals with a county and takes in payment of his demand a warrant of the character of these, no time of payment being fixed, does so under an implied agreement that if there be no funds in the treasury out of which it can be satisfied, he will wait until the money can be raised in the ordinary mode of collecting such revenues. He is presumed to act with reference to the actual condition and the laws regulating and controlling the business of the county. He cannot be permitted, immediately upon the receipt of such warrant, to resort to the courts to enforce payment by judgment and execution, without regard to the condition of the treasury at the time, or the laws by which the revenues are raised and disbursed.

This leads us to the conclusion that there is no right of action shown by the petition, and that the demurrer interposed by the defendant should have been sustained and the action dismissed. For these reasons the judgment of the District Court is reversed, and the case remanded with instructions to dismiss the action without prejudice.

Judgment reversed and cause remanded.

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