Field v. Village of Highland Park

Montgomery, J. (after stating the facts). Mr. Justice Field, in Wall v. County of Monroe, 103 U. S., at page 77, in speaking of warrants in every way similar to the one under consideration, said: “They are orders upon the treasurer of the county to pay out of its funds for county purposes not otherwise appropriated the amounts specified. They establish prima facie the validity of the claims allowed and authorize their payment. But they have no other effect. * * * The warrants being in form negotiable are transferable by delivery so far as to authorize the holder to demand payment of them and to maintain in his own name an action upon them. But they are not negotiable instruments in the sense of the law merchant, so that, when held by a bona fide purchaser, evidence of their invalidity or defenses available against the original payee would be excluded. The transferee takes them subject to all legal and equitable defenses which existed to them in the hands of such payee.” Numerous cases have been decided in harmony with this holding, including a decision in point by this court. See Miner v. Vedder, 66 Mich. 101. See, also, School District Township of Newton v. Lombard, 2 Dill. (U. S.) 493. Relator’s counsel .does not insist that this paper is negotiable within the law merchant, but claims that the village is now estopped, after renewing the paper in the hands of the bank, from refusing payment; that the village has elected to rely upon the bond both by the original issue of the order and by its repeated renewal. We do not con [72] sider this position tenable. It is true the village council is by section 2872, 1 Comp. Laws, given power to borrow money in anticipation of the collection of special assessments actually made, not in excess of the assessment; but not only is this order in excess of the unused portion of the assessment, but the transaction was in no sense a. borrowing of money. The issue of the first order Was an attempt to advance the paper of the village to a contractor to whom no money was at the time due. Had it brought suit upon this order, the court could not have entertained the contention that the village had borrowed money. The village had no power to lend its credit. As we have seen, had the bank undertaken to enforce the original order, it would have had to meet the same defenses which would have been open as against the payee. No new consideration has passed either from the bank or Rorison, and the rights of neither are greater than they would have been under the original warrant. The order is reversed, with costs. Moore, C. J., and Carpenter, McAlvay, and Ostrander, JJ., concurred.