103 N.W. 390 | N.D. | 1905
The complaint sets forth three causes of action, the first of which is in substance as follows: On October 7, 1895, the defendant city issued to McDonald & Q’Neil a warrant for the payment to them of $500 out-of the Front street paving fund of said city, which warrant was issued in part payment of the agreed price for paving part of said street. That said paving had been done by McDonald & O’Neil under a contract with the city wherein said contractors agreed to do the paving for a fixed price, and were to be paid by the city in warrants drawn upon, and payable out of, a paving fund to. be created and collected by the defendant under and pursuant to the laws of the state applicable to the paving of cities. That the warrant was presented for payment, and not paid for want of funds, and was subsequently assigned to plaintiff. That the city collected and received into its treasury money properly applicable to the payment of the warrant in question sufficient in amount to pay the same, but wrongfully applied such money to the satisfaction of other warrants subsequently presented and registered for payment. It is further alleged that, if sufficient money had not been collected to pay all such paving warrants, such failure was due to the neglect of the city to take proper steps to that end. The second and third causes are in the same form. The second is based upon a second Front street paving warrant held by plaintiff, and the third is upon a .similar warrant issued under a contract for paving Eighth street, similar in terms to the Front street contract. The answer was a general denial and certain affirmative-al
It is claimed in behalf of the appellant that when the city council decided to have this paving done, and made the contract therefor, the city’s indebtedness exceeded the constitutional limit of 5 per cent of the assessed valuation of taxable property therein; that the contract, at least to the extent of the cost of street intersections, purported to create an indebtedness against the city payable by general taxation; that no appropriation for that purpose preceded the contract, and there was no record of the yea and nay vote of the members of the council with respect to the incurring of the debt and the disbursement of the moneys therefor. By reason of these facts, all of which did not appear in the case of Pine Tree Lumber Co. v. City, 12 N. D. 360, 96 N. W. 357, which involved this same paving contract, it is urged that that case is not decisive of this; and the correctness of that decision in some respects is also questioned. It will be unnecessary to pass upon these propositions, because we are agreed that the city is not in a position, under the undisputed facts of this case, to escape liability by urging the invalidity of the acts of its officials which preceded and resulted in the payment into its treasury of the money collected and received by it for the sole purpose of paying for that part of the value of the paving represented by plaintiff’s warrants.
With respect to the Front street paving, the undisputed facts are that on July 29, 1895, pursuant to some resolution or ordinance which does not appear, the city made a contract with McDonald & O’Neil whereby the latter undertook to pave a part of Front street for an agreed price, payable' in city warrants from time to time as the work progressed. The paving was completed and accepted, and warrants were issued to the contractors in payment therefor; amongst them being the two warrants in suit, Nos. 11,217 and 11,219. The total cost of the work for which warrants were issued was $23,025.22. For some reason which does not appear, the entire cost of the paving was not assessed upon the abutting property. The cost of paving the street intersections was paid for from a fund styled “Street Intersection Fund,” which was created by general taxation. The remainder of the cost of the work was pro
The money derived from special assessments cannot be diverted to any other use than the payment of the obligation for which the assessment was made. Rev. Codes 1899, section 2183. When sufficient money had been collected from the special assessment to pay all the warrants presented and registered for payment prior to the two in question, every dollar thereafter coming to that fund, up to the amount required to redeem each of these warrants, became impressed with a trust'in favor of the holder of each warrant, and the city was the trustee. If the trust funds were, misapplied, the city is liable to the same extent as any other unfaithful trustee. Pine Tree Lumber Co. v. City, 12 N. D. 360, 377, 96 N. W. 357, and authorities there cited.
The limitations upon the débt-creating power, the inhibition against contracts without a prior appropriation therefor, the provisions requiring the recording of the yeas and nays upon propositions to appropriate or expend money, and other provisions of that character, whether constitutional or statutory, were designed for the protection of those upon whom, as taxpayers, the burden of the
It is finally urged that the diversion of the money was the wrongful -act of the city treasurer, for which he, and not -the city, is liable. That argument is manifestly untenable. There is no privity between the creditors of the city and the treasurer. The latter is the agent of the muncipality, and for any violation of his duties he is answerable 'to his principal. The receipt of the money imposed an obligation upon the city in favor of the contractors or their assignee. The malfeasance or misfeasance of the treasurer can no more absolve the city from its obligations to third persons than could like acts by an agent of a .private person relieve his principal of like obligations.
Some of the evidence which was admitted to establish some of the material facts upon which we base this decision was objected to for incomipetency and immateriality. Numerous assignments of error are based .upon such rulings of the trial court. The materiality of the evidence has already been shown. Counsel have not pointed out any reason to question the competency of the proof, and, where a ruling is not palpably erroneous, this court will not search for error. Supreme Court rule 14.
The judgment and order appealed from are affirmed.