Montana Attorney General Opinion 15-567

Opinion No. 567 State Auditor-State Treasurer-War- l-ants--Duplicate Wat'rants -Sureties, Liability of. HELD: 'Where a warrant is repre- sented as lost and a duplicate warrant is issued to the payee and both war- rants are paid by the state treasurer: (1) If the payee, or some one au- thorized by him, endorsed both the orig- inal and duplicate warrants and caused them to be presented for payment, tllen he and his sureties are lia\)le under Section 159, R. C. M., 1921; (2) If tile original warrant was lost and the endorsement thereon forg- ed, there is no liability on their part hut the State may recover from subse- quent endorsers on the original war· rant. July 7, 1934. It appears that on November 23, 1932, the state auditor drew a warrant. upon the general fund for the sum of $67.50 in favor of one Agnes V. Peterson bc- cause of pu\)lic services rendered \)y her. On or about December 12, 1932, she represented to the auditor that the warrant had been lost or destroyed and requested him to issue a duplicate war- rant to her. On that day, also, she executed a bond to the State of Mon- tana in the sum of $135.00, with Nora E. Harber and W. R. Ha~,.ie as sure- ties, conditioned to save the obligee and its officers Ilarmless on account of the 394 OPINIONS OF THE ATTORNEY GENERAL issuance of the duplicate warrant, and c1eposited the same with the auditor. Thereupon, the auditor issued the dup- licate warrant as requested. It appears further, that on December 1. 1932, the original warrant, with the name of Agnes V. Peterson indorsed thereon, was received by the Choteau County Bank at Fort Benton, Montana. On December 31, 1932. the state treas- urer registered the warrant and on May 20, 1933, he paid the bank the face value thereof with interest. On .Tune 20, 1933, Agnes V. Peterson pre- sented the duplicate warrant to the state treasurer for payment and the same was b~' him paid in full. On this statement of the facts you ask us to "advise if the principal and sureties on the indemnity bond filed with the state auditor are liahle to the state for the amount which the state has lost by reason of the auditor exe- cuting a duplicate warrant." 'l'he duplicate -warrant was evidently issued under the authority of section 159, Revised Codes of 1921, which reads as follows: "The state auditor is hereby empowered and authorized to issue a duplicate warrant whenever any war- rant drawn by him upon the treasurer of the State of Montana shall have heen lost or destroyed. This duplicate warrant must be in the same form as the original, except that it must have plainly printed across its face the word 'duplicate,' and no such warrant shall be issued or delivered by the state auditor, except the person entitled to receive the same shall deposit with the state auditor a bond in double the amount for which the duplicate war- rant is issued, conditioned to save the State of Montana, and its officers. harmless on account of the issuance' of said duplicate warrant." A diligent search through the books has failed to reveal any case entirely like this in its facts. State ex reI. Ackerman v. Meath, 87 ·Wash. 659, 152 Pac. 536, comes closest in that regard. 'fhere, the state auditor, on December 21, 1914, issued to O. A. Burkland a warrant upon the state treasurer for the sum of $36.90, payable out of the accident fund of the Industrial Insur- ance Department. On January 28, 1915, Burkland, claiming to have lost this warrant, applied to the state auditor for a duplicate warrant. He made affi- da \'it in writing of that fact and of the fact that the warrant was unpaid. and also furnished the auditor an in- demnity bond. Thereupon the auditor. on February 3, H115, issued to him' a duplicate of the original warrant, of the same date, with the word "Dupli- cate" indorsed across the face thereof. On February 1. 1!)15, this duplicate warrant was hy Burkland caused to be presented to the state treasurer for payment, when it was accordingly paid. Thereafter, on or about April 16, 1915, Burkland, then having the original war- rant in his posseSSion. assigned and delivered the same for valuable con- sideration to S. L. Ackerman. Some time subsequent to April 16, 1915. Ackerman presented the original war- rant to the state treasurer for pay- ment, which was b~' him refused. In a mandamus proceeding instituted by Ackerman the court held that the treas- urer was right in refusing to pay the original warrant, on the theory that Ackerman was in 110 better position to claim payment than was Burkland. After consideration of such authori- ties as we could find, it is our view that if Agnes V. Peterson herself in- dorsed the original warrant and de- livered it to the Chouteau County Bank or if she authorized somebody else to indorse her name thereon and deliver it, to the bank. she and her sureties are liable on the bond. On the other hand, if the warrant was lost and the in- dorsement thereon forged there is no liability on their part. In that event pa~'ment of the warrant by the tIeas- urer would be deemed voluntary, in the sense that there was no legal obli- gation on him to make it. (Oregon- 'Washington R. & Nav. Co. v. Washing- ton Tire & Rubber Co., 219 Pac. 9; 31 C .. T. 440.) Again, if the latter con- dition existed when the warrant, was received hy the bank it acquired no title thereto aud the State of Montana can recover from the bank the amount which the treasurer paid to it. (People v. Chapman, 61 Cal. 262; Citizens' Nat. Bank v. City Nat. Bank, 82 N. W. 464; Levy v. First Nat. Bank, 43 N. W. 354; State ,'. Broadway Nat. Bank, 282 S. W. 194; 8 C. J. 608.) The right to recover is strengthened, if poSSible, by the fact that the bank expressly guar- anteed the prior indorsement made on the warrant. H may be well, however, to call the OPINIOXS OF THE ATTORXEY GENERAL 39li a tten tion of the ba nk a t once to the peculiar de\"elopments recited above alHI which have been taken substan- tin lIy from your letter.