MONTEITH v. PARKER. [36 Oregon, 170.] CORPORATIONS-INTEREST MUNICIPAL ON WAR RANTS.-Warrants for the payment of money against a municipal corporation presented to the city treasurer and indorsed by him "not paid for want of funds," as authorized by ordinance, are thereafter interest bearing from that date. MUNICIPAL CORPORATIONS ARE LIABLE FOR INTEREST on their debts the same as individuals. MUNICIPAL CORPORATIONS-INTEREST ON WARRANTS.-If an interest bearing warrant against a city is surrendered and others to an equal amount are issued in lieu thereof, and dated and indorsed as the original, the later issue cannot be regarded as a payment, but merely as an exchange, and they too bear interest the same as the original. Cox, Cotton, Teal & Minor and J. M. Long, for the appellant. Weatherford & Wyatt, for the respondent. 173 MOORE, J. The charter of the city of Albany contains the following provision: "The city of Albany shall not be bound by any contract, or in any way liable thereon, unless the same is authorized by ordinance," etc.: Charter of Albany, c. 11, sec. 137; Laws 1891, p. 720. At the time the warrants in question were issued, section 4 of ordinance No. 161 of said city was in force, and provided that: "When any city warrant shall be presented to the city treasurer, and there is no money in the treasury to pay the same, the treasurer shall indorse on the back of said warrant, Presented and not paid for want of funds,' also the time of making such indorsement; and he shall keep a record of such orders or warrants, in a book kept for that purpose; whenever the city treasurer shall pay any such warrant so indorsed he shall cancel the same, as other warrants are canceled by him, and enter the 174 same in the book of indorsed orders." If it be conceded that no authority existed for writing on the face of the warrants the clause to the effect that they should bear interest, yet, each warrant having been presented to the city treasurer, and indorsed by him, “Not paid for want of funds," the question is presented whether this indorsement rendered them interest bearing at the legal rate prescribed by statute. The statute regulating the rate of interest, which was in force when these warrants were indorsed, provided: "That the rate of interest in this state shall be eight per centum per annum and no more on all moneys after the same become due": Hill's Annotated Laws, sec. 3587. The state treasurer is required, if there are no funds on hand with which to pay state warrants, to indorse thereon, "Not paid for want of funds," together with the date, and all warrants so indorsed shall draw legal interest from such indorsement: Hill's Annotated Laws, sec. 2219, subd. 3. If there be no funds with which to pay county orders, the county treasurer is required to make the same indorsement upon them when presented to him, and such indorsement entitles them to draw legal interest until notice is given that there are funds for their redemption: Hill's Annotated Laws, sec. 2465; Laws 1893, p. 59. 1. It is contended by plaintiff's counsel that a municipality is invested by the legislative assembly with delegated power, in the exercise of which it becomes a sovereign in a degree similar to that of the state or of a county, and that, inasmuch as the statute contains no provision regulating the payment of interest upon city warrants, the city is not liable therefor, unless made so by its ordinance providing for the payment thereof, and that the indorsement of a city treasurer upon such warrant to the effect that it was not paid for want of funds is ineffectual to make it interest bearing. The state, by reason of its sovereignty, cannot be compelled to pay interest 175 on its debts after they become due, without its consent, evidenced by an act of its legislative assembly, or by lawful contract of its executing officers: United States v. North Carolina, 136 U. S. 211; Carr v. State, 127 Ind. 204, 22 Am. St. Rep. 624. So, too, a county, which is an instrumentality of the state, and organized to promote the general welfare, exercises a degree of sovereign power which renders it exempt from the payment of interest upon its matured debts, unless by its agreement or by legislative enactment the duty of paying interest is imposed upon it: Seton v. Hoyt, 34 Or. 266, 75 Am. St. Rep. 641. The legislative assembly, recognizing the existence of this legal principle, has furnished the creditor a method by which he may secure from the state or from a county a recognition of the maturity of its obligation, and an admission of its liability to pay interest thereon. The fact that the legislative assembly has not prescribed a method by which a creditor may compel a city to pay interest on its matured obligation is a circumstance tending to show that a municipal corporation was considered by the law-making body as a private person, and subject to the provisions of the statute regulating the payment of interest by natural persons. Notwithstanding a municipal corporation has delegated to it certain powers of government, it Am. St. Rep., Vol. LXXVIII-49 is to be regarded as a private person with respect to its contracts, which are to be construed in the same manner and with like effect as those of natural persons: Touchard v. Touchard, 5 Cal. 306; Argenti v. San Francisco, 16 Cal. 255. The rule announced in those cases was practically affirmed in this court in the case of Shipley v. Hacheney, 34 Or. 303, in which it was held that the liability of a city for interest on its debts does not materially differ from that of an individual. The reason for the distinction 176 that a municipal corporation is subjected to burdens and exposed to liabilities not imposed upon a county is found in the fact that it is endowed by the legislative assembly with greater power. A county, as a division of the state, may impose taxes upon the property of its citizens, provided they are equal and uniform. A city, in addition to exercising the same power, may make local improvements, and assess the cost thereof upon the property specially benefited thereby, which a county is not empowered to do. Many similar instances could readily be cited, showing the superior power delegated to a city, but the one given is sufficient. This grant of additional power to a city carries with it corresponding obligations, among which is a liability upon its contracts to the same extent as is imposed by law upon private persons: Dillon on Municipal Corporations, 4th ed., secs. 26, 966. "The rule in respect to interest on debts against municipal corporations does not ordinarily differ from that which applies to individuals": Dillon on Municipal Corporations, 4th ed., sec. 506. In addition to the cases cited by Mr. Chief Justice Wolverton, in Shipley v. Hacheney, 34 Or. 303, as illustrative of this legal principle, see Seymour v. Spokane, 6 Wash. 362. The contracts of a municipality being treated as those of a natural person brings the obligation of a city for the payment of money within the general provisions of the statute rendering such evidence of debt interest bearing after the same become due: Hill's Annotated Laws, sec. 3587. Whatever the rule may have been at common law with respect to the payment of interest, commercial transactions between private persons have so multiplied in modern times that a promise to pay interest is necessarily implied from the inability, failure, or neglect of a debtor to pay money when it becomes due: Thorndike v. United States, 2 Mason, 1; Fed. Cas. No. 13,987; and our statute, operating upon such promise, enforces it in favor of a creditor. When a warrant is issued for the unconditional payment of money by a city, the municipal corporation is not bound, like 177 a private person, to seek its creditor, to make payment of its indebtedness, the law implying from the issue of the warrant that it is payable upon demand at its treasury: Pekin v. Reynolds, 31 Ill. 529, 83 Am. Dec. 244. This imposes upon the creditor holding the warrant the duty of making a demand upon the city treasurer for its payment, thereby fixing the maturity of the debt, and, if not paid for want of funds, putting the city in default: Sibley v. Pine County, 31 Minn. 201. And the treasurer's indorsement of this fact upon the warrant, in pursuance of an ordinance authorizing it, affords the evidence that it bears interest from the date of such indorsement: People v. Canal Commrs., 5 Denio, 401; State v. Trustees, 61 Mo. 155; Poultney v. Wells, 1 Aiken, *180. The warrants involved in this suit were presented to the treasurer at the time they were issued, and indorsed by him, "Not paid for want of funds.” This, as we have seen, made them interest bearing from that date. 2. The warrant for five thousand dollars, it will be remembered, was surrendered, and five others, of one thousand dollars each, were issued in lieu thereof, and dated and indorsed as the original. "Equity regards the substance and intent, not the form": 11 Am. & Eng. Ency. of Law, 2d ed., 184. This maxim is as applicable at the present time as it was when it was first formulated. Invoking it here, we conclude that the issue of the latter warrants was not a payment, but an exchange for the original, including the principal and interest due thereon. It follows from the foregoing that the warrants in question bear interest from the date of 178 their indorsement, and the court erred in enjoining the payment of such interest. The part of the decree appealed from is therefore reversed, and the injunction dissolved, the appellants to recover their costs in this court and in the court below. INTEREST-LIABILITY OF MUNICIPALITY FOR.-The indebtedness of a municipal corporation does not bear interest in the absence of an express agreement to that effect, and of legislation giving power to contract for the payment of interest: Pekin v. Reynolds, 31 Ill. 529, 83 Am. Dec. 244. The liability of a state to pay interest is considered in the note to Carr v. State, 22 Am. St. Rep. 648. INTEREST.-IF COUPONS TO CITY BONDS can, in any event, draw interest, it can be only after a proper demand of payment: Pekin v. Reynolds, 31 Ill. 529, 83 Am. Dec. 244. That interest is recoverable on coupons after their maturity, see the monographic note to Morris Canal Co. v. Fisher, 64 Am. Dec. 441. EX PARTE YOUNG. [36 Oregon, 247.] CONSTITUTIONAL COMMERCE – INTERFERENCE WITH SEAMEN.-A statute making it a crime to persuade or attempt to persuade any seaman to leave any vessel within the jurisdiction of the state, is a valid exercise of the police power, and not unconstitutional as a regulation of or interference with interstate or foreign commerce. CONSTITUTIONAL LAW-INTERSTATE COMMERCE.-It is only when a statute of a state conflicts with an act of Congress regulating foreign or interstate commerce, or contravenes the general policy of the government, that it must yield. CONSTITUTIONAL LAW-REGULATION OF COMMERCE. A state has power to enact a statute regulating commerce within its borders if the subject covered is one over which Congress has not assumed control. C. M. Idleman, C. F. Lord, and D. R. N. Blackburn, attorney general, for the state. 247 MOORE, J. The question presented by this appeal is whether the statute under which Young was indicted is violative of 248 the constitution of the United States, article 1, section 8, subdivision 3, as being an attempt on the part of the legislative assembly to regulate commerce with foreign nations. The act under consideration reads as follows: "If any person or persons shall entice, persuade, or by any means attempt to persuade, any seaman to desert from, or without permission of the officer then in command thereof to leave or depart therefrom, either temporarily or otherwise, any ship or steamer or other vessel while such ship, steamer, or other vessel is within the waters under the jurisdiction of this state or within the waters of the concurrent jurisdiction of this state and the territory of Washington, such person or persons shall, upon conviction thereof before any justice of the peace, or before a circuit court of this state, be punished," etc.: Hill's Annotated Laws, sec. 1952. Notwithstanding Congress possesses power to regulate commerce with foreign nations and among the several states, each state has retained a sufficient measure of power to enable it to enforce its internal police regulations, in the exercise of which it can establish and regulate ferries across its navigable rivers, control the moving of vessels in harbors within its borders, and enact health and inspection laws, which, by quarantine or otherwise, may operate on persons brought within its jurisdiction in the course of commercial operation: 22 Am. & Eng. Ency. of Law, 1st ed., 712; King v. American Trans. Co., 1 |