Goldman v. Conway County.

considered in determining the question of the receiver's compensation.

It would be improper for us to discuss the question whether these items and others objected to should be allowed to the receiver in his final accounts.

All questions of that character must be reserved until the hearing upon the master's report upon that subject.

What we now decide is, that there is no showing of such fraudulent conduct on the part of the receiver as should deprive him of compensation for services. The order is that petitioner be allowed for extraordinary services the sum of $4,390, to be credited to him on final settlement.

I have examined carefully the facts upon which the application for additional compensation is claimed, and fully concur in the foregoing opinion of the circuit judge, McCrary. (Signed) R. R. NELSON, Judge.

JACOB GOLDMAN v. CONWAY COUNTY.

(Eastern District of Arkansas. October, 1880.)

1. STATUTE OF LIMITATIONS-COUNTY WARRANTS.- Where a county may be sued on its ordinary warrants and compelled by mandamus to levy a tax to pay them, the statute of limitations begins to run against such warrants from the date of their issue.

The plaintiff's cause of action is ordinary county warrants, in the form prescribed by statute, issued before the thirtieth day of October, 1874, and presented to the county treasurer for payment, and by him indorsed "not paid for want of funds," more than five years before the commencement of this suit. The statute of limitations of this state declares that "actions on promissory notes and other instruments in writing," and all actions not specifically named in the act, shall be barred in five years after the cause of action accrued. Gantt's

Goldman v. Conway County.

Digest, sections 4125, 4129. The county pleaded the statute of limitations in bar of the action. The plaintiff demurred to the plea.

Clark & Williams, for plaintiff.

John Fletcher, for defendant.

CALDWELL, District Judge. It is well settled that counties may plead the statute of limitations to actions founded on contracts and unliquidated demands. Dillon's Mun. Corp. sec. 533; Baker v. Johnson County, 33 Iowa, 151. Such a plea may be interposed by a city to an action upon its notes. De Cordova v. Galveston, 4 Tex. 470. And in Louisiana it is held to be a good plea to an action on warrants issued by the police jury of the parish which are analogous to, if not identical with, our county warrants. Perry, Adm'r, v. Parish of Vermillion, 21 La. Ann. 645. And the statute begins to run against interest coupons, attached to negotiable bonds issued by municipal corporations, from the time they mature, although they remain attached to the bond which represents the principal debt. Amy v. Dubuque, 98 U. S. 470. In this state counties are declared to be bodies corporate with power to contract and sue and be sued. This carries with it the right, when sued, to interpose every defense, legal and equitable, which it may have, including the statute of limitations. Not only are counties and all municipal corporations in this state within the protection afforded by the statute of limitations, but the state as well. An act passed in 1855 and still in force, declares that "lapse of time and statutes of limitations shall apply in suits against the state in like manner as suits against individuals, and may be pleaded and relied on with like effect.” Sec. 5677, Gantt's Digest. This provision clearly indicates a state policy favorable to statutes of repose.

It is not seriously contested that a county may avail itself of this defense generally, but it is said not to be applicable to this class of paper. The force of this argument depends on

Jacob Goldman v. Conway County.

the legal characteristics of these warrants under the laws of the state where issued. Where a county is not liable to be sued on such warrants and cannot be coerced to levy a tax for their payment, the statute probably would not run against them; and the cases of Justices, etc. v. Orr, 12 Ga. 137, and Carroll v. Board, etc. 28 Miss. 38, decided this and no more.

But it is the settled law of this court that suit may be maintained on the class of warrants here sued on; and that under section 10 of article 16 of the constitution of 1874, the county court may by mandamus be compelled to levy a tax, not to exceed the limit prescribed by that section, to pay a judgment recovered thereon. Shirk v. Pulaski County, 4 Dillon, 209 and note.

It is also settled that the orders of allowances in pursuance of which such warrants are issued have not the force of judicial judgments which estop or conclude the county, and that every holder of such paper takes it subject to all defenses the county would have against the original payee. Id.

They are prima facie evidence of indebtedness upon which suit may be maintained and the county coerced to levy a tax to pay them; and where this is the law they stand on the same footing, so far as relates to the statute of limitations, as bonds, coupons, accounts or other demands, which confessedly fall within the statute.

A statute of this state authorizes the county courts to require all holders of warrants to present them to the court "in order to redeem, cancel, re-issue or classify the same, or for any lawful purpose," and declares holders of warrants who do not present them at the time fixed by the court, of which notice. is to be given in a mode prescribed by the statute, "shall thereafter be debarred from receiving any benefit from them." Sections 614-616, Gantt's Digest.

It is insisted this method of barring warrants is exclusive of all others. The design of this act is to enable the county court to ascertain with precision the amount of outstanding warrants, and to reject and cancel such as have been illegally

Goldman v. Conway County.

or fraudulently issued, to the end that they may not be redeemed by the treasurer or received by the collector in payment of taxes.

It rests in the discretion of the county court as to whether such calls shall be made; they cannot be made oftener than once a year and may never be made, and if not made, the rights of the county when sued are not affected by that fact.

If this act precludes the county, when sued, from pleading the statute, it is not perceived why it would not preclude it as well from showing the warrants were illegally or fraudulently issued, or any other fact that would have authorized the county court to cancel them if a call had been made.

Another statute provides that all warrants shall be received, irrespective of their number and date, in payment of taxes and debts due the county. Section 610, Gantt's Digest.

When taken in connection with another section of the same act (sec. 1042, Gantt's Digest), the purpose of section 610 is plain. Section 1042 provides that if there is not money enough in the treasury to pay all outstanding warrants, then the treasurer shall pay them only in the order of their number and date; and section 610 was enacted to show that the rule relating to the order of payment of warrants by the treasurer was to have no application when they were tendered to the collector in payment of taxes and debts due the county; that for such purpose there was to be no preference or precedence between warrants bearing different dates. It does not affect the ques

tion of limitation.

The warrants are due and payable on the day they are issued, and the statute runs from that date. If construed to be payable on demand they would be payable at once, and the statute would run from their delivery. Palmer v. Palmer, 36 Mich. 487. Where they are presented to the treasurer and indorsed by him as then required by law, the statute runs from that date.

It is no answer to the plea to say the treasury of the county never contained funds to pay the warrants. They were a legal

Goldman v. Conway County.

tender in payment of taxes, and it was open to the plaintiff by appropriate judicial proceedings to compel funds to be placed in the treasury for their payment, and the right of action accrued when the warrants were issued and not when there were funds in the treasury for their payment. Where a contract was made for work, payable out of a public fund, it was held that the statute began to run from the time the work was completed, although the fund was not then raised. Emery v. Day, 1 Crompton, M. & R. Ex. 245.

The statute of limitations is one of repose. It is not based upon presumption of payment, but on the impolicy of permitting stale demands and transactions long past to be made the subject of judicial inquiry, and hence neither indisposition nor inability of the debtor to pay is an answer to the plea. There is the same reason for giving counties the benefit of it as individuals.

It is not always true that outstanding warrants have never been paid by the county or that they ought to be paid. It not unfrequently occurs that they are issued illegally and without consideration, and the records of this court disclose the fact that warrants once redeemed were afterwards fraudulently withdrawn and put in circulation.

The county is as likely to be deprived of the evidence of such facts by lapse of time as an individual, and for that reason should have the same protection from the statute.

The form of warrant prescribed by statute contains no seal; there is no statute in terms requiring the clerk to affix the county seal to such instruments, and it is not affixed to the warrants sued on, so that the question of the period required to bar sealed instruments does not arise in this case.

The question whether warrants are valid without a seal was not raised in argument and is not decided.

Demurrer overruled.