Talk:Warrant of payment
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It would be nice to have a photo of one of the new California IOUs. Ecphora (talk) 13:05, 11 July 2009 (UTC)
I created a sample Registered Warrant that shows what one looks like without violating any copyright. Greensburger (talk) 20:11, 8 August 2009 (UTC)
Warrants are Not Debt, Please Update[edit]
The various descriptions of municipal warrants as "debt instruments" should be removed or changed. Municipal warrants are not debt instruments:
Banking Law Journal Digest (1919), p. 216:
"The warrants of a municipal corporation are not negotiable instruments. They do not constitute a new debt, or evidence of a new debt, but are only the prescribed means devised by law for drawing money from the treasury. First National Bank v. Cook, 43 Neb. 318, 61 N.W. Rep. 693. 12 B.L.J. 151."
Furthermore, the US Supreme Court has made clear that lower courts mistakenly treating municipal warrants as debt are in error: "The holder of a valid warrant, having an adequate remedy at law, cannot maintain a bill in equity against a municipality for the specific performance of the obligation to pay contained in the warrant." (typical syllabus of Raton Waterworks Co. v. Raton, 174 US 360)".
Note that various lower courts and some legal sources incorrectly state or imply that a warrant constitute a debt, however, these erroneous characterizations tend to occur when a warrant holders rights are not the subject of discussion. As the Supreme Court decision clearly indicates a warrant holder has no claim of equity against either the issuer or recipient of a municipal warrant and hence such a warrant does not constitute a negotiable debt.
John Chamberlain (talk) 17:41, 29 July 2009 (UTC)
More on Warrants of Payment[edit]
The key thing about a warrant is that it is an order from one official to another, not a promise to the holder. Even if the warrant holder would benefit from the order being carried out the holder has no direct claim against either the person who issued the order or the person who is the subject of the order. If the order is not executed then normally the holder's only recourse is to get a judge to order the official who received the order to execute it, ie pay the money. This type of action is called a petition for a writ of mandamus. The judge will only issue a writ of mandamus if the warrant was authorized by law. So if a municipal warrant is issued without an authorizing law or is not compliant with the law in some way it can be refused. An official can also show other cause why the warrant is invalid. For example, if the receiver of the order does not have the money to pay the order then the order is void because it is impossible to execute it. In such cases the holder has no further legal recourse.
What about corporate warrants? Corporations imitate the idea of warrants to do things like offer money or stock under various conditions. Like government warrants they are superficially orders from one official to another, except the "officials" are just designated company employees. There the similarity ends, however. If corporate warrants were orders and orders only the company would have no legal obligation to pay them so typically a corporate warrant has special clauses written into it that make specific promises to the holder. These promises make corporate warrants into contracts that give the holder claims against the company if it fails to execute the orders given by the warrant. Thus, if a company fails to perform on its warrants usually the holder can sue the company based on these special clauses. John Chamberlain (talk) 01:23, 9 August 2009 (UTC)