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Charter Provision Requires Mayor to Sign Warrants But Is Silent as to Checks

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Reviewed Date: September 24, 2018

Original Author: 
Hemsley, Sid
Date Created: 
Jan 11, 2000


Subjects:
Finance
Finance--Notes
Mayor

Charter Provision Requires Mayor to Sign Warrants But Is Silent as to Checks

Summary: 
MTAS was asked whether a 'warrant' is the same as a check for the purposes of a charter provision requiring the mayor to sign warrants, but is silent as to checks.


You have the following question: Is a “warrant” the same as a check for the purposes of a charter provision requiring the mayor to sign warrants, but is silent as to checks?

The answer is no. A warrant is not a check.

It is said in 15 McQuillen, Municipal Corporations, Section 42.01, that:

A municipal warrant or order is an instrument generally in the form of a bill of exchange or order drawn by an officer of a municipality upon its treasurer, directing him or her to pay an amount of money specified to the person named, or his or her order, or bearer. It is in the ordinary form of commercial paper, but it does not possess all the qualities of commercial paper. It is regarded as an order of the municipal corporation on itself, and, in substance, is a mere promise to pay the amount specified....A warrant is not payable at a definite time like a bond or note, and will only be paid when there is sufficient money in that particular fund on which it is drawn to cash it. In short, a warrant is a nonnegotiable obligation of a municipal corporation given for an indebtedness created prior to its issuance. [Emphasis is mine.]

It is also said in 15 McQuillen, Municipal Corporations, Section 42.02, that:

A warrant is sometimes characterized as a promissary note, in effect, or more properly a nonnegotiable promissory note, but it is not strictly either a promissary note or a bill of exchange. As often pointed out, a warrant possesses none of the attributes or qualities of commercial paper save the capacity of being transferred by delivery or assignment. [Emphasis is mine.]

Tennessee law on the character and nature of warrants is similar. It is said in Macon County v. Dixon, 100 S.W.2d 5 (1936), that:

A county warrant is merely an order on the treasurer to pay a certain sum of money. While it is prima facie evidence of an indebtedness on the part of the county and of the claim for which it was issued, it is not a conclusive adjudication in the sense that a judicial decision is, and the county is not estopped from afterward questioning its validity. [At 8]

A county warrant is not a negotiable instrument but it is a written order by the proper officer upon the trustee of the county to pay a specified sum of money to the person named thereon, or to the bearer. Although it is not negotiable, it is assignable. [At 8] [Emphasis is mine.]

Warrants may be issued at any time the county incurs a valid obligation. This may be done even when there is no money in the treasury to pay them. No warrant can be lawfully paid unless an appropriation therefor is made. [At 13] [Emphasis is mine.]

Clearly, then, a warrant is not a check, it being in the nature of a promissory note evidencing an indebtedness upon which a check (or other form of payment) by a government could be issued, or other form of payment of the debt by the government could be made. It is not the payment of the promissory note itself. As indicated in the citation above, a warrant can be issued even when the government has insufficient funds to pay the indebtedness reflected on the warrant.

I have been unable to find any case in which it has been held that a charter provision authorizing the mayor to sign warrants either does or does not apply to checks. However, a charter provision giving the mayor the authority to sign “warrants” but which is silent as to checks, suggests that its legislature understood the distinction. Under the rules of statutory construction, words in statutes are given their plain and ordinary meaning. For those reasons, it seems reasonable that the term “warrants” applies to the instruments described above, and does not include checks.


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