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Opinion of the Court.
sec. 502. This may very well be in regard to those warrants when, as above stated, they have been, in fact, signed by the proper officers, and very probably the presumption may then be made that those officers who are proved to have signed the warrants have done their duty; but we are aware of no case where it has been held, in the absence of a statute to that effect, that the mere production of a paper upon which is written or printed an obligation of a county, bearing certain names thereon, can be put in evidence without the slightest proof that the signatures on the paper were those of the persons they purport to be. No such case has been called to our attention, and we think there is no principle upon which such a holding could stand.
The cases referred to by counsel simply hold the burden of proof shifted, after there has been proof of the execution of the warrants; that such proof makes out a prima facie case against the county. Such are the cases of Commissioners &c. v. Day, 19 Indiana, 450, and Commissioners of Leavenworth County v. Keller, 6 Kansas, 510. In both those cases the warrants were proved to have been signed by the proper authorities of the county before they were admitted in evidence, and it was said in the Indiana case, upon these facts, that "the officer, in the discharge of his general powers, will be presumed to have done his duty, in drawing the warrant or order, till the contrary appears; and, hence, such order makes a prima facie cause of action," citing Hamilton v. The Newcastle & Danville Railway, 9 Indiana, 359. And in the Kansas case it appeared that the county board audited and allowed the bill of claimant, and that a county warrant was drawn in his favor for the amount due, and signed by the chairman of the board, and it was held that upon those facts an action might be maintained on the warrant, but that it was liable to be defeated by showing that the tribunal which issued it had no authority to make the allowance on which the warrant was issued. In other words, that proof being given of the signature of the proper officer, the warrant was admissible in evidence and constituted a prima facie case against the county, and any
Opinion of the Court.
facts going to show that no cause of action existed rested upon the defendant to prove.
In Grayson v. Latham, 84 Alabama, 546, 549, 550, two county warrants were sued on which were alleged and purported to have been issued by the commissioners of the county of Pickens and signed by the probate judge. In delivering the opinion of the court, Stone, Chief Justice, said:
"The warrants declared on, issued and signed by the judge of probate, as they were shown to have been, prima facie, imported a liability on the county. Upon the question we have been discussing, the plaintiff made a prima facie case when he produced and proved his warrants, showed that they had been registered, proved that, in the receipt and disbursement of county funds, the time had arrived for their payment, according to their place on the registry, and that payment has been demanded and refused; or, if payment was not shown to have been demanded, by proving that demand would have been unnecessary. Making this prima facie case, if made, the burden would then be shifted to the defendants to overturn the presumption of liability."
Another case relied upon to sustain the ruling of the courts below is that of Wall v. County of Monroe, 103 U. S. 74. That case does not show that the warrants were proved by their mere production; on the contrary, it appears that the warrants were drawn by the clerk of the county upon the treasurer in favor of one Frank Gallagher, and transferred by him to the plaintiff. Their execution was alleged and proved, and the question decided had no relevancy to the matter here under discussion.
No case cited by counsel shows that there is anything peculiar to a paper in the form of a county warrant which proves itself upon mere production.
It is clear, then, that at common law, in an action upon such an instrument, and upon a pleading denying the execution thereof by the defendant, and setting up its forgery, the plaintiff in order to be entitled to put the instrument in evidence, and thereby to make a prima facie case, would be compelled to prove its execution. The question is, what difference the statute of Arizona makes in this rule.
Opinion of the Court.
The Revised Statutes of Arizona, 1887, provide:
"735. (Sec. 87.) Any answer setting up any of the following matters, unless the truth of the pleadings appear of record, shall be verified by affidavit
"8. A denial of the execution by himself or by his authority of any instrument in writing upon which any pleading is founded, in whole or in part, and charged to have been executed by him or by his authority, and not alleged to be lost or destroyed. Where such instrument in writing is charged to have been executed by a person then deceased, the affidavit will be sufficient if it state that the affiant has reason to believe and does believe that such instrument was not executed by the decedent or by his authority."
The answer in this case did deny the execution on behalf of the county of these warrants, and alleged that they were forgeries made to defraud it. The affidavit of verification was made by the clerk of the board of supervisors, who swore that the facts stated in the answer, as defences to the various causes of action declared on, were true, and that the warrants sued on were not genuine. The statute does not require that the affidavit should contain a denial of the execution of the instrument on which suit is brought. It requires that any answer which contains a denial of the execution of an instrument shall be verified, and the verification in this case is not open to the objection of insufficiency urged by the appellee.
We have then the fact as stated by the Supreme Court of the Territory, that this answer was verified, and that the appellee did not introduce any evidence to establish the genuineness of the warrants sued on, and as a conclusion of law from those facts the court held the plaintiff entitled to judgment on the ground that the verified answer did not put the plaintiff to proof of the genuineness of the warrants.
It seems plain to us that the court did not give that force to the verification of the answer which it was entitled to, and that by reason of such verification the defendant was not only put in position to prove the facts set up in the answer, but the plain
Opinion of the Court.
tiff in the action was thereby compelled to prove the execution of the warrants by the proper officers of the county.
Statutes similar to this have been passed in other States, and it has been held in Colorado, in Lothrop v. Roberts, 16 Colorado, 250, 254, that an answer denying the execution of a note, under oath, made it necessary for the plaintiff to give proof of its execution before the note was properly admissible in evidence.
In Horn v. Water Company, 13 California, 62, under a somewhat similar statute, where the answer was a general denial, without verification, the genuineness and due execution of the note sued on were regarded as admitted.
To the same effect is Corcoran v. Doll, 32 California, 82, 88, where it was stated that the action being upon a note and the complaint containing a copy, and the answer not verified, the due execution of the note was admitted.
In Shepherd v. Royce, 71 Ill. App. 321, under a similar statute, it was held that the effect of the verification of the plea setting up the forgery of a note sued on, was to cast upon appellant the burden of proving the execution of the note as at common law, citing Wallace v. Wallace, 8 Ill. App. 69.
The Michigan courts have decided in the same way upon the same kind of a statute. Ortmann v. Merchants' Bank, 41 Mich. 482; The New York Iron Mine v. The Citizens' Bank, 44 Mich. 344.
We have no doubt that the effect of the statute of Arizona is that when the defendant does not verify his answer in a case provided for therein, the note or warrant or other paper sued on is admitted as genuine, but when the answer denying that fact is verified, the plaintiff must prove it as he would have had to do at common law in a case where the genuineness of the paper was put at issue by the pleadings.
Upon the facts found by the district judge and accepted by the Supreme Court of the Territory in this case, and upon the additional facts found by that court, we are of opinion that the judgment entered under its direction is erroneous, and not warranted by those fucts, and therefore it is reversed, and the case remanded with directions to grant a new trial, and it is so ordered.
Statement of the Case.
DAGGS v. PHOENIX NATIONAL BANK.
APPEAL FROM THE SUPREME COURT OF THE TERRITORY OF ARIZONA.
No. 138. Submitted January 30, 1900.- Decided April 30, 1900.
In the provision in Rev. Stat. § 5197 that when no rate of interest “is fixed by the laws of the State, or Territory, or District" in which a bank is situated it " may take, receive, reserve or charge a rate not exceeding seven per cent," the words "fixed by the laws" must be construed to mean "allowed by the laws."
THIS cause embraces three suits brought by the Phoenix National Bank against A. J. and R. E. Daggs, defendants in error. They were respectively numbered 2554, 2555 and 2556, and were consolidated by stipulations of the parties.
They were brought to recover on three promissory notes, aggregating the sum of $9741.73, signed by A. J. Daggs, one of the appellants. Each note was dated November 1, 1894, and payable on or before one year from date, with interest at the rate of ten per cent per annum. Also, to foreclose certain mortgages executed to secure the notes-one executed by R. E. Daggs on the 28th of November, 1894, on certain real estate in Maricopa County, Arizona, and on four water rights of the Consolidated Canal Company, represented by certificates; two executed by A. J. Daggs on same day, on certain other real estate situate in the same county.
The answers were substantially the same in all of the cases. They admitted the making of the notes and mortgages, but alleged that the interest charge was usurious, and in violation of sections 5197 and 5198 of the Revised Statutes of the United States.
As a counter-claim it was alleged that the plaintiff (appellee) was indebted to the defendant (appellant) upon a certain promissory note, executed by W. A. Daggs and P. P. Daggs, as copartners and as individuals, and delivered to Thomas Armstrong, Jr., and assigned by him to the plaintiff in blank, and by the latter, on the 28th of November, 1894, for a valuable