I must dissent from the foregoing opinion in so far as it holds that the bonds in question are nonnegotiable. I agree with the holding that the law of Washington controls.
The majority opinion holds that under Rem. Comp. Stat., §§ 3392 and 3394 of our negotiable instruments statute, bonds of the character here in question are negotiable, unless they contain a provision showing that the order or promise to pay is to beonly out of a particular fund. This, of course, is a restatement of our decision in Manker v. American Savings Bank Trust Co., 131 Wn. 430, 230 P. 406. It is said that the bonds here in question indicate that they are payable only out of a certain fund, because the bonds contain the following provision:
"The Treasurer of the City of Billings, Montana, *Page 612 will pay to Warren Construction Company, or bearer, the sum of Five Hundred and no-100 Dollars, as authorized by resolution, etc., as passed on the 6th day of June, 1922, creating Special Improvement District No. 196, for the construction of the improvement and the work performed as authorized by said resolution to be done in said district, and all laws, resolutions and ordinances relating thereto and in accordance therewith."
And by reason of the following provision contained therein:
"This bond is payable from the collection of a special tax or assessment which is a lien against the real estate within the Improvement District, and described in said Resolution hereinbefore referred to. This bond is redeemable at the option of the City at any time there are funds to the credit of said Special Improvement District Fund for the redemption thereof, and in the manner provided for the redemption of the same, provided, however, that payment shall not be made later than such time as will permit the levy of twelve annual consecutive tax levies after the date of the issuance thereof."
But, manifestly, these provisions do not state that the bond is payable only from a certain fund. These provisions indicate a particular fund out of which reimbursement is to be made, and the statute expressly provides that such provision does not make the bonds non-negotiable. In construing the words "as authorized by Resolution passed on the 6th day of June, 1922, etc." it must be borne in mind that bonds, warrants, notes, etc., are intended to be used as negotiable paper and that we should not give the words contained therein a construction which tends to prevent their negotiability, otherwise we have curtailed one of the important features of commercial paper. The words, "as authorized by resolution," would not, to my mind, indicate to the ordinary purchaser of such a bond anything *Page 613 more than that the issuance of the bond was the result of due authorization.
It is interesting to make a comparison between the Manker case, supra, and this one. In that case the bonds provided that the holder should have no claim against the city "except from the special assessment made for the improvement for which the bond was issued." Another provision is that "The City of Seattle hereby promises to pay . . . or bearer . . . out of the fund established by Ordinance No. 36562 of said City, and known as Local Improvement Fund District No. 3032, and not otherwise." And further that, "The holders or owners of this bond shall lookonly to said fund for the payment of either the principal or interest on this bond."
Clearly, these provisions show that the bond is payable only out of a particular fund. In the instant case there is not a single provision in the bond to show that it was payable only out of a particular fund other than the statement that the bond is payable "as authorized by resolution." These words also indicate the circumstances leading up to the transaction which caused the issuance of the bond. Section 3394, Rem. Comp. Stat.,supra, as cited in the majority opinion, leaves out subdivision 2 thereof. It is provided in § 3394, supra, that, "An unqualified order or promise to pay is unconditional within the meaning of this act though coupled with — . . . (2) A statement of the transaction which gives rise to the instrument."
I am unable to conclude that the words "as authorized by resolution" mean anything more than a statement of the transaction which gave rise to the instrument.
In my judgment the bonds were negotiable and title thereto passed by delivery.
MAIN and MACKINTOSH, JJ., concur with ASKREN, J. *Page 614