Cleveland State Bank v. Cotton Exchange Bank

• Decision Date: 10 March 1919
• Docket Number: 20453
• Court: Mississippi Supreme Court
• Parties: CLEVELAND STATE BANK v. COTTON EXCHANGE BANK

81 So. 170

119 Miss. 868

CLEVELAND STATE BANK v. COTTON EXCHANGE BANK

No. 20453

Supreme Court of Mississippi

March 10, 1919

Division A

APPEAL from the circuit court of Bolivar county, HON. W. A. TALCORN JR., Judge.

Petition for mandamus by the Cotton Exchange Bank against the Cleveland State Bank. From a judgment ordering a peremptory writ, respondent appeals. See, also, 79 So. 810.

The facts are fully stated in the opinion of the court.

Judgment reversed and cause remanded.

A. W. Shands, for appellant.

It appears from the pleadings of this case that the superintendent of public education issued several thousand dollars of pay certificates, certifying that certain parties named had taught certain schools in Bolivar county for certain months during the latter part of the year 1915, and that the clerk of the chancery court issued the warrants of the county on such pay certificates, but did not deliver these warrants to the parties named.

It appears conclusively that none of the persons named had a license to teach school in Bolivar county. It further appears that no contract had ever been made with these teachers to teach any school in Bolivar county. It further appears that no list was ever filed with the chancery clerk containing the names of any of the persons to whom these warrants were made payable, designating them as teachers in Bolivar county; and it further appears that in reality they did not teach the school for the period for which the warrant was issued.

The law requires that before a teacher can receive pay, the county superintendent must issue pay certificate, that the teacher must hold a proper license, must have a proper contract, and must have taught the school.

The superintendent of education is a public official and has no authority except such as is vested in him by the public law of the state, and any act done by him without such statutory power is null and void. This question has been before almost every court in the United States, and it is unanimously held that a public agent cannot bind beyond the scope of his statutory authority. Section 205, Volume 1, Clarke & Skyles on Agency.

To the same effect see Mayor and City Council of Baltimore v Reynolds, 83 American Decisions, 535; Johnson v Frisbie, 96 American Decisions, 508; United States v. Nicoll, 1 Paine, 646; Delafield v. State of Illinois, 26 Wend. 162; Mayor, etc., of Baltimore v. Reynolds, 20 Md. 1; Whitesides v. United States, reported in 23 Lawyers Edition, United States Supreme Court Reports at page 882; Rose's Notes which case collates the later cases on this subject.

I refer to the above authorities, indicating the general doctrine. I think, however, the question has been, for a long time, thoroughly settled in the state of Mississippi. I refer the court, first, to the case of the Supervisors v. Arrighi, 54 Miss. 668, Klein Case, 51 Miss. 813, where it is held by the court, Justice CHALMERS delivering the opinion, that a warrant issued by the board of supervisors on a contract for public work, which was actually done, if resulting from the contract not entered into according to the method prescribed by the statute, is unenforcible. Supervisors v. Klien, 51 Miss. 807; Beck v. Allen, 58 Miss. 142.

In the case of McCulloch et al. v. Stone, 64 Miss. 378, the court in a very extreme case upheld the doctrine for which I contend, in opinion delivered by Chief Justice COOPER. Murdock v. Chaffe, 67 Miss. 740, from which authorities, I contend that if there were a complete absence of Mississippi decisions on the statute prescribing the conditions upon which valid warrants, may be issued to school teachers, the court would be forced to conclude that these warrants in this case are uninforcible; but fortunately we have express decisions in Mississippi upon some of these questions.

It will be noted that among other allegations of the notice under the third plea is the allegation that no one of the persons to whom any of the warrants, payment of which was refused, was issued held a license to teach school in Bolivar county, Mississippi. In this connection, I wish to call the court's attention to the case of Wayne County v. Hooper, 75 So. 766 (unlawful contract).

It will also be noted that it is alleged in the said third plea, that no contract had ever been made by the superintendent for the teaching of schools in Bolivar county with any one of the persons to whom these warrants were nominally issued. In the case of Moore v. State, 65 S. R. 126, it further appears that no list of teachers was ever filed with the chancery clerk containing the names of any of these persons to whom warrants were issued.

The statute, paragraph "m," section 4497 of the Code of 1906, expressly provides that a county superintendent shall issue no pay certificates until he has filed such list in the office of the chancery clerk. This statute is a limitation upon his power to issue a warrant, and until it has been complied with, any warrant issued by him is issued without authority of law, is ultra vires and not binding upon the county.

But it will probably be argued that this is a suit by holders of warrants who did not have knowledge of the invalidity of such warrants, and that they had the right to presume that, being issued under the hand and seal of the chancery court, they were valid and binding obligations upon the county. I wish to call the court's attention to the fact that nowhere in the pleadings does any such allegation appear, but, as this argument was made upon the trial in the court below, I anticipate that it will be made here.

In this connection I wish to call the court's attention to the case of Loomis v. Brown County, 91 N.W. 309, which expressly holds that an assignee of a county warrant is in no better position than is the assignor.

The doctrine of caveat emptor applies with its fullest force to the purchaser of school warrants. See: Oppenheimer v. School District, 72 N.E. 1100; Davis v. Steuben School District, 50 N.E. 1; Kellogg v. School District, 74 P. 110; Fine v. Stewart, 48 S.W. 371; School Directors v. Fogelman, 76 Ill. 190; Joyce Defenses to Commercial Paper, par. 83; 23 Inc. of Law, page 385, par 2, in notes,

The chancery clerk is only authorized to issue school warrants when the teacher presents to him a proper pay certificate. No lawful pay certificate was presented to the chancery clerk, and he was, therefore, without authority in law to issue the warrant.

It will be noted from the records that the parties to whom the warrants were issued actually did not teach schools, for the teaching of which warrants were issued to them in payment. Certainly it cannot be held that if the county superintendent sees fit to issue a warrant for the teaching of schools when in fact no school was taught, that the payment of such warrant can be enforced, because the party to whom such warrant was issued must of necessity know of its unlawful issuance, and will not be heard to say that if he accepted such warrant he was not a party to the conspiracy to defraud the county of the common school fund.

I respectfully submit that for all of the reasons above set out, that these warrants are void, and as this case will have to be tried on the proof, I respectfully request of the court a decision on all of the questions presented, because they will come up on the retrial of this case, and in order that litigation may be shortened, I respectfully submit that the court should decide on the sufficiency of each of the matters set up in the notice under the general issue. And for this reason, I have discussed all of the propositions raised.

The court will, no doubt, be surprised on the reading of this record to see that the plea of general issue has been stricken out by a trial court, because it does not show grounds which would warrant the defendant in refusing to pay. I understand that the plea of General Issue, by virtue of section 3234 of the Mississippi Code of 1906, puts in issue every allegation of the petition.

Defendant still occupies the same position and does not now claim any property rights on the subject-matter of this litigation other than is connected with its duty as a public depository to protect this fund from any unlawful drafts upon it.

Wherefore I respectfully submit that these three causes submitted to you should be reversed and remanded.

J. W. Cutrer, and Powell & Mayes, for appellee.

The real question involved in this case is as to whether or not when the law has given authority to certain officers to issue warrants against the county, requiring them, before issuing the warrants to determine certain facts which are not and cannot be known to the purchasers of the warrants, and the officers appointed by law are designated by the county and required to give bond for the faithful performance of their duty, and those officers pass upon the facts and direct that pay certificates and warrants be issued and the warrants are issued and contained on their face all that the law requires, and subsequently reach the hands of a bona-fide purchaser without notice, can the county, under these circumstances, refuse payment of the warrants? This is the question which the court is asked to determine in this case.

Our contention is that the county is estopped, under the above circumstances, from repudiating payment of the warrants. In order for the court to get in touch with the question, it will be necessary to call the court's attention, first, to certain provisions of the code, next, to allegations of the petition for writ of mandamus, and thirdly, to the attempted answer on the part of the appellants.

The superintendent of county public schools and the issuance of the pay certificates to the teachers of the county...