and said act, and should be regarded as actual settlers from the date of actual settlement or occupation. The plaintiff settled upon this land November 22, 1889, and made his homestead entry within the prescribed time, and when he made his final proof his title to the land related back to the date of his settlement; and, the said second survey being subsequent to plaintiff's settlement and entry, the defendant could not rightfully enter upon said land, and locate a new right of way, under the act of 1875. Larsen v. Navigation Co., 19 Or. 240, 23 Pac. Rep. 974; Faull v. Cooke, 19 Or. 455, 26 Pac. Rep. 662; Sturr v. Beck, 10 Sup. Ct. Rep. 350.

The defendant claims that when the plaintiff commuted his entry, and paid the money in lieu of the time required under the homestead law, he thereby changed his entry into a pre-emption, and in consequence thereof its rights attached under its second map of withdrawal, and became paramount to plaintiff's. The commutation of a homestead entry under section 2301, Rev. St., is not an exercise of the pre-emption right. In re Brittin, 4 Dec. Dep. Int. 441; Cotton v. Struthers, 6 Dec. Dep. Int. 288; In re Hewit, 8 Dec. Dep. Int. 566. It was held in Railroad Co. v. Whitney, 132 Ú. S. 357, 10 Sup. Ct. Rep. 112, that the decisions of the land department on matters of law were not binding upon that court, but that on questions similar to the one involved in this case they are entitled to great respect at the hands of any court. It would seem that the commutation of a homestead is not the exercise of the pre-emptive right, and that the decisions of the land department upon this question, while not binding upon the courts, are consonant with reason and the rule in such cases. It follows that the plaintiff's entry was prior to defendant's second survey, and that it had no right to construct its railroad across his land, and that the decree of the court below must be affirmed.

1. Under Hill's Ann. Laws, § 2239, a county may be sued on account of any matter arising out of its corporate obligation, whether created by contract or otherwise.

2. Hill's Ann. Laws, § 2789, requiring the governor, secretary of state, and the state treasurer, on receiving the assessment rolls of the different counties, to compute the total revenue needed for state purposes, and the resulting rate of taxation, and to apportion the total revenue among the counties according to the amount of property subject to taxation, to be paid to the state treasurer out of the first moneys collected, creates the relation of debtor and creditor between each county and the state, as regards the levy so made, and an action will lie to enforce such debt.

3. The obligation of a county to pay its

proportion of the state taxes is a liability created by statute, within the meaning of Hill's Ann. Laws, § 6, requiring an action on such liability to be brought within six years.

Appeal from circuit court, Baker county; James A. Fee, Judge.

Action by the state of Oregon against Baker county. From a judgment for defendant, the state appeals. Reversed.

Geo. E. Chamberlain, Atty. Gen., for the State. M. L. Olmsted, for respondent.

BEAN, J. This action was commenced early in 1892 to recover the unpaid balance of the state taxes charged and apportioned to Baker county during the years 1879 to 1885 inclusive, and from 1889 to 1891 inclusive. The complaint contains 10 counts or causes of action, and in eacn count all the facts necessary to show the liability of the county are alleged. To the first six causes of action a demurrer was interposed on the ground that they were barred by the statute of limitations, and to the entire complaint a demurrer, which was sustained by the court below, on the ground that the plaintiff had no capacity to sue, and for want of jurisdiction of the subject-matter. In support of the ruling of the court below it is contended that this action cannot be maintained under section 350, Hill's Ann. Laws, which provides that "an action may be maintained against any of the organized counties of this state upon a contract made by such county in its corporate character, and within the scope of its authority, and not otherwise." In Grant Co. v. Lake Co., 17 Or. 453, 21 Pac. Rep. 447, this court had occasion to consider the effect of this section, and it was therein held that the authority to maintain an action against a county on an obligation created by law is not derived from said section, but exists independently of it, and that section 350 must be construed in connection with section 2239, which subjects a county to a suit or action on account of any matters arising out of its corporate obligations, whether created by contract or otherwise. If, therefore, the duty of Baker county to pay its proportion of the state taxes is a corporate obligation, imposed upon it by law, it is clear, under the decision referred to, that this action can be maintained; and this brings us to the principal question in the case. It is contended for the defendant that there is no corporate obligation on the part of the county to pay the amount of state taxes apportioned to it, but that the remedy of the state is against the treasurer of the county, whose duty it is to pay the amount so apportioned, and not against the county in its corporate capacity. So far as the taxes accruing prior to the act of February 26, 1885, are concerned, this question was, in effect, decided adversely to the defendant's contention in Multnomah Co. v. State, 1 Or. 359. In that case it was held that the law created the relation of debtor and creditor between

the several counties and the state, and, as no particular remedy was provided for enforcing the obligation, it would necessarily follow that an action at law is the proper remedy. The act of 1885 (Laws 1885, p. 135) does not, it seems to us, change this relationship, but only the mode of ascertaining the amount to be paid by the several counties. To hold that under this act the counties of the state are not severally made liable for the amount of state taxes assessed upon the property within them would be doing violence to both the spirit and letter of the law. After making provisions for ascertaining the property in each county subject to taxation, and the value thereof, the law re quires the county clerk to transmit to the secretary of state a certified copy of the assessment roll, (section 2788,) and the governor, secretary of state, and state treasurer, acting jointly, immediately after receiving the abstracts of the assessment rolls of the several counties, to ascertain by computation, in a specified manner, the total amount of revenue necessary for state purposes, with the resulting rate of taxation, and to apportion the total revenue among the several counties according to the amount of real and personal property subject to taxation therein, (section 2789,) to be paid to the state treasurer, in gold and silver coin, out of the first moneys collected and paid into the county treasury, (section 2813,) without any deduction or abatement on account of delinquent taxpayers, (section 2791,) and to be levied and collected in each county in the manner other taxes are levied and collected, (section 2790.) All this points clearly to the county as the principal debtor. It would be difficult to find language more expressive of the legislative intent and purpose to make the counties liable in their corporate capacity for the amount of the state tax apportioned to each. The state does not deal with the individual taxpayers, or assume any responsibility for the collection of the tax, but with the county only. The revenue of the state is apportioned among the counties, to be paid by them in proportion to the taxable property in each. This is the basis upon which the amount payable by each county is to be ascertained. The primary liability belongs to the counties, and the state looks to them alone for its revenue. The means afforded them to raise the money with which to discharge this duty is given by providing that it shall be levied and collected in each of said counties in the manner other taxes are levied and collected. The machinery for raising and collecting taxes is exclusively under the control of the counties, and vested in officers in whose election or appointment the state has no voice, and for whose acts it is in no way responsible. It imposes upon each of the several counties the burden of contributing a just proportion of the expenses of the state government, at the same time providing it with the means of raising the

funds with which to discharge the obligation, and holds the county responsible for the entire amount so apportioned, whether collected or not. While there is no provision in the law, as it now stands, directing or requiring the state treasurer to charge the several counties with the amount so apportioned, yet the effect of the law is to create the relation of debtor and creditor between the counties and the state. County of Schuylkill v. Com., 36 Pa. St. 524; People v. Supervisors of St. Clair Co., 30 Mich. 3SS.

But it is argued that a tax is not a debt which can be enforced by action, or upon which a promise to pay can be implied. It may be admitted that, as between the sovereign and the taxpayer, a tax is not, in a technical sense, a debt which can be collected by suit or action, unless the law so provides, either expressly or impliedly. But if the obligation of the several counties in this state to contribute, in proportion to the taxable property within them, to the expenses of the state government, can be said to be a tax, within the meaning of the rule above indicated, no means is provided by law for its enforcement, except the general provisions authorizing the state to sue, and the county to be sued; and no rule is better settled than the one stated by Mr. Justice Story, that: "By the common law an action of debt is the general remedy for the recovery of all sums certain, whether the legal liability arises from contract, or be created by statute, and the remedy as well lies for the government itself as for a citizen; and where the debt arises by statute an action or information of debt is the appropriate remedy, unless a different remedy be prescribed by statute." U. S. v. Lyman, 1 Mason, 498; Gilliam Co. v. Wasco Co., 14 Or. 525, 13 Pac. Rep. 324; Grant Co. v. Lake Co., 17 Or. 453, 21 Pac. Rep. 447; Savings Bank v. U. S., 19 Wall. 227.

The next objection involves the statute of limitations. For the purposes of this case the statute provides that "an action upon a contract or liability, express or implied," or "upon a liability created by statute, other than a penalty or forfeiture," shall be commenced within six years, and for any other cause of action within ten years, after the cause of action shall have accrued, (sections 6, 11,) and that these limitations shall apply to actions brought in the name of the state, (section 13.) It is manifest that this is not an action upon a contract, express or implied; and the question then presented is whether it is an action upon a liability created by statute, and therefore barred within six years, or a cause of action not otherwise provided for, and therefore not barred for ten years. The test as to whether a liability is one created by statute is said to be "whether, independent of the statute, the law implies an obligation to do that which the statute requires to be done, and whether, independently of the statute, the right of ac

tion exists for a breach of the duty or obligation imposed by the state." Wood, Lim. Act. § 39. If so, then the liability is not one created by statute. But if it is an obligation imposed wholly by statute, and without which it does not exist, it is then a liabuty created by statute, and in this state is barred within six years. Higby v. Calaveras Co., 18 Cal. 176; Chase v. Lord, 16 Hun, 369; Richards v. Wyandotte Co., 28 Kan. 326; Shepherd v. Hills, 25 Law J. Exch. 6. Within this rule it seems clear that the duty or obligation of a county to contribute or pay its proportion of the state taxes is wholly a liability created by statute. Independently of the statute, the law implies no obligation whatever upon a county to do that which the statute requires to be done, and except for the statute there would be no liability or right of action. The obligation of a county to contribute its proportion of the state taxes is entirely a creature of the statute, and exists only by virtue thereof, and is consequently a liability created by statute, within the provisions of subdivision 2, § 6. And since the legislature has thought proper to provide that the statute of limitations shall apply to actions brought in the name of the state, in the same manner as to actions by private parties, it follows that if the state fails to prosecute its demand for the period during which the claim of a private individual is protected it must suffer the same consequences. The judgment of the court below must be reversed, and the cause remanded for further proceedings not inconsistent with this opinion.

(24 Or. 188)

COMMERCIAL NAT. BANK OF PORT-
LAND v. CITY OF PORTLAND.
(Supreme Court of Oregon. June 27, 1893.)
MUNICIPAL CORPORATIONS-PUBLIC IMPROVEMENTS
-PAYMENT FROM PARTICULAR FUND-DELAY IN
RAISING FUND-LIABILITY OF CITY.

1. A stipulation in a contract by a city for a public improvement, that the contractor shall look for payment to a particular fund to be raised by assessment, does not relieve the city from liability for negligently delaying to raise such fund.

2. In an action by the assignee of the contractor for such alleged negligence, it appeared that the work was completed and accepted by the city in 1887; that in 1888 a temporary injunction restraining the city from collecting the assessment was obtained by certain property holders on the line of such improvements; that such injunction suit was permitted to lie five years; that all this time the city had enjoyed the benefits of the improvement; that the present action had been pending since 1891. Held, that there had been such an unreasonable delay on the part of the city in raising such fund as would charge it with neglect of duty.

Appeal from circuit court, Multnomah county; E. D. Shattuck, Judge.

Action by the Commercial National Bank of Portland against the city of Portland for damages because of the nonpayment of certain warrants issued by defendant city upon a

special fund. Judgment for plaintiff. Defendant appeals. Affirmed.

The other facts fully appear in the following statement by LORD, C. J.:

This is an action brought by the plaintiff for damages because of the nonpayment of certain warrants issued by the defendant city upon a special fund to be raised by the levy and collection of assessments upon the real property affected by the improvement of Twelfth street, in the city of Portland, from the south line of B street to the north line of Montgomery street. The complaint sets out in full the ordinance of the defendant providing for the time and manner of improving the street named, and also the contract under which the work was performed. It is shown that this contract was awarded to P. H. Schulderman & Co. on the 18th day of August, 1887. The contract contained a stipulation that upon the completion of the improvement according to its terms, and on the approval and acceptance of the same, the contracting firm would be entitled to certain specified sums of money for the various kinds of work done, and should be paid "by warrants to be drawn upon the fund, to be collected and paid into the city treasury for that purpose." The contract contained the further stipulation that "it is expressly agreed, and this contract is made upon condition, that the parties of the first part [meaning the contractors] shall look for payment for said labor and material only to the aforesaid fund, to be assessed upon the property liable to pay the said improvement, and collected and paid into the city treasury for that purpose, and that the said parties of the first part will not require the city of Portland, by any legal process or otherwise, to pay for the same out of any other fund." The contract was properly executed, and the work thereunder was completed within the time therein limited, and was duly accepted by the city. In the months of October and November, 1887, city warrants were duly issued to the contractors, and some of them, aggregating $2,202.34, were duly assigned to plaintiff. These warrants were drawn on the said fund for the improvement of Twelfth street. The complaint further alleges that all the warrants enumerated therein were, prior to the bringing of this action, indorsed in blank by said P. H. Schulderman & Co., and assigned and transferred for value to the plaintiff, and that the plaintiff is now the owner and holder of all of said warrants; that demand was made upon the city treasurer for the payment thereof, which was refused, and that there is now due and payable from the defendant to the plaintiff the full sum mentioned in said warrants, with interest at legal rates from the date of issue. The plaintiff claims that it was and is the duty of the defendant city to collect from the various owners of property abutting upon said Twelfth street the several sums ascertained

by the defendant to be the cost of making said improvement, and the charges specifically made against the various parcels of land affected by and liable for said improvement; that the defendant has wholly failed and neglected to perform this duty, and has not collected from the property holders the money with which to pay the warrants described, and is making no effort so to do; that by reason of the alleged neglect of duty by the defendant, plaintiff claims to be damaged in the amount of said warrants and the interest thereon. A demurrer to the amended complaint was filed, and, after argument, was overruled. Thereupon the defendant filed an answer in the nature of a plea in abatement, averring that certain property holders on the line of said improvement had begun a suit to restrain the collection of said assessment for the improvement of Twelfth street, upon various grounds. The city filed its answer, denying all the material allegations of the complaint, and pleading new matter by way of defense. On February 18, 1888, a temporary restraining order was issued as prayed for, which order is still in force, and it is now claimed by the city that by reason thereof it has been unable to collect the assessments necessary to meet the warrants of plaintiff. The plaintiff demurred to the plea in abatement, which was sustained, and judgment rendered in favor of the plaintiff for the full amount claimed, from which judgment an appeal is taken to this court.

Wm. T. Muir, for appellant. Durham & Platt, for respondent.

LORD, C. J., (after stating the facts.) The principal question in this case is whether the city is liable for the payment of the warrants in question in view of the stipulation requiring the contractor to look to a special fund for payment, and undertaking to exempt the city from general liability. The facts show that the contract under which the work was done was made on the 18th day of August, 1887, and that the improvement provided for therein was completed prior to the 16th day of November, 1887, in accordance with the terms of such contract, and was thereupon accepted by the city, and warrants, made payable out of the fund for such improvements, were issued to the contractors, among which were the warrants assigned to the plaintiff. As several years have intervened since the issuance of such warrants, and the city has failed and neglected to raise the special fund to pay them, the plaintiff has brought an action against the defendant for negligence, claiming that he is damaged in the amount of the warrants in question, and interest due thereon, and that the city is liable therefor. To defeat such action the defendant relies upon the stipulation in the contract, claiming that it limits the liability

of the city to the special fund to be raised by assessments upon the property affected by the improvement, and confines the contractor's right of recovery to such fund. The stipulation provides that the contractor shall look for payment to the special fund, and that "he will not compel the city, by legal process or otherwise, to pay for the improvement out of any other fund," and the defendant contends, if any force or ef fect is to be given to such stipulation, that it is only liable to pay the warrants in question when such special fund is raised and collected, and consequently that the defendant is not liable generally in an action for damages upon them. This view would relieve the city of any liability to pay such warrants until such special fund is raised and collected by assessments, although its failure to realize such fund may be due to its own neglect or unreasonable delay. Under its charter the city is invested with the power to order local improvements, and afforded the means to raise the necessary funds to pay for them by assessments upon the property benefited thereby. When the city orders a local improvement, the duty devolves upon it to put the necessary machinery in motion to raise the funds to pay for it by assessments upon the property affected. This duty devolved upon the city when it ordered the improvement of Twelfth street, so that when the defendant entered into a contract for doing the work, and the contractor stipulated to look for payment to the special fund to be raised by assessments, the obligation rested upon the city to prosecute in good faith and with reasonable diligence the means afforded to it, under its charter, to raise and collect the fund necessary to redeem its obligation. There is no pretense but what the obligation resting upon the contractor to perform the work and furnish the materials required has been satisfactorily performed, and the improvement accepted. Having performed his obligation, the duty rested upon the city to discharge its obligation. "When the contractor," says Ruger, C. J., "had performed his work according to his contract, he had no duty remaining to discharge, and then had a right to rely upon the implied obligation of the city to use with due diligence its own agencies in procuring the means to satisfy his claims. It could not have been supposed that he was not only to earn his compensation, but also to set in motion and keep in operation the several agencies of the city government, over whom he had no control, to place in the hands of the city the funds necessary to enable it to pay its obligation. That was a power lodged in the hands of the city, and the clear intent of the contract was that it should exercise it diligently for the purpose of raising the funds necessary to pay for the improvement; for an omission to do so it would become liable to pay such damages as the contractor might

In North Pacific Lumbering & Manuf'g Co. v. East Portland, 14 Or. 6, 12 Pac. Rep. 4, Thayer, J., says: "The improvement is supposed to be a benefit to the lot owners referred to, and the lots affected are charged with the cost of making it. The city occupies the relation in the proceeding more of an agent than a principal. It does not undertake to pay the contract price for making the improvement out of the general funds of the city. I do not think it has any power to enter into such an engagement for the improvement of the city, but it does undertake to perform all the acts required by the charter intended to supply the requisite fund to defray the expenses attending it, and a failure to comply with any of the requirements of the charter by which the funds may be realized would subject it to a general liability." The distinction which is sought to be made between that case and the case at bar is not tenable. The stipulation of the contractor to look to a special fund did not absolve the city from the duty of putting the necessary machinery in motion to raise and collect such fund to redeem its obligation and to pay the warrants in question. When the contractor performed his contract, the duty rested upon the city to make an active effort to discharge its obligation. Has it done it? The record discloses that the work was completed and accepted by the city in 1887. The plea of abatement which was overruled by the court shows that in February, 1888, a temporary injunction was obtained against the city. For five years the injunction suit has been permitted to lie. For more than five years the city has had the use of the improvement, and there is nothing to indicate that it has made any effort to press the injunction suit to trial. The present action has been pending since May, 1891, which includes a period sufficiently long to have prosecuted the injunction suit to a final determination, and yet the record shows, and the argument concedes, that nothing has been done in the

been such unreasonable delay as would charge the city with liability for neglect of duty? It has been repeatedly held that it is presently liable, if the failure of the city to raise the fund and pay over the same to the contractor is due to its own neglect or unreasonable delay. In Cumming v. Mayor, etc., 11 Paige, 596, it was held that it was the duty of the officers of the corporation to see that a proper assessment for the improvement was made, and that the money was collected thereon, and paid over to the contractor within a reasonable time after the completion of the improvement; and that, as the officers of the corporation had unreasonably neglected to compel a proper assessment to be made, the complainants were entitled to payment out of the general funds of the corporation. This case was approved and followed in Baldwin v. City of Oswego, 1 Abb. Dec. 62, in which the defendant was held liable "on account of the neglect of its officers to enforce the legal instrumentalities provided for enforcing payment against the parties primarily chargeable with such payment." Nor is there anything in the cases of McCullough v. Mayor, etc., 23 Wend. 458, and Lake v. Trustees, 4 Denio, 520, cited and relied upon by the appellant's counsel, in conflict with this contention. In the former of these cases, Bronson, J., said: "If the common council has neglected that duty, [that is, of putting the necessary machinery in motion,] or has been wanting in diligence, an action on the case would perhaps lie," etc. In the latter, which was an action on a warrant drawn by the trustees of the village upon the treasurer, the same judge remarked that the question whether the plaintiff had a remedy on the case against the trustees for neglect of duty did not arise on the bill of exceptions. In Buck v. City of Lockport, 6 Lans. 251, Johnson, J., said: "The corporation cannot thus [that is, by neglecting to act] keep its creditors at bay, and then defend itself on the ground that its own officers and agents have not done what it is their duty to do." In Richardson v. City of Brooklyn, 34 Barb. 569, and Hunt v. City of Utica, 18 N. Y. 442. no negligence was shown, but the principle is recognized that for the negligence or unreasonable delay of the city to perform its duty it is liable. In the first of these cases the court says: "This shows a case of due diligence on the part of the council in attempting to fulfill the duty enjoined upon them by the charter. If they had unreasonably neglected or refused to make the assessment, or to take the necessary steps for the collection of the tax, or refused to pay over the money when collected, an action on the case might be sustained against them." The theory is that, when the municipality passes an ordinance for a local improvement, it is its duty to prosecute with diligence the means afforded to it, under its