County Board of Education v. Slaughter

• Decision Date: 28 March 1935
• Docket Number: 5 Div. 195
• Citation: 160 So. 758,230 Ala. 229
• Parties: COUNTY BOARD OF EDUCATION v. SLAUGHTER.
• Court: Alabama Supreme Court

160 So. 758

230 Ala. 229

COUNTY BOARD OF EDUCATION v. SLAUGHTER.

5 Div. 195

Supreme Court of Alabama

March 28, 1935

Appeal from Circuit Court, Chambers County; W.B. Bowling, Judge.

Action on a promissory note by G.W. Slaughter against the County Board of Education of Chambers County. From a judgment for plaintiff, defendant appeals.

Reversed and remanded.

Jas. W Strother, of Dadeville, for appellant.

C.S Moon, of LaFayette, and Denson & Denson, of Opelika, for appellee.

KNIGHT Justice.

Suit by G.W. Slaughter, plaintiff in the court below, against the county board of education of Chambers county.

The plaintiff stated his cause of action in four counts. We can well treat the case, on this appeal, as fully presented by count three, which declares upon a promissory note executed by the county board of education to the plaintiff. However as against defendant's demurrer, each of the counts were sufficient, each being in the form prescribed by the Code.

The pleadings in the case are voluminous, consisting of many pleas, replications, and rejoinders, with demurrers to all the pleas (except the plea of the general issue) replications, and rejoinders. However, as we view the case, the only pleading necessary to a proper determination, were the complaint and defendant's plea that the note was without consideration.

There is but little, if any, real conflict in the evidence.

The board of education undertook to secure a loan of $1,500 from Dr. Slaughter, and in order to obtain the loan, the board, on March 1, 1933, executed a promissory note, payable to Dr. Slaughter on March 1, 1934. The note was signed by the board of education, by S.H. Oliver, president, and attested by G.M. Barnett, as secretary. This note was delivered by the board to D.T. Tatum, who was at the time the treasurer of the school board of Chambers county, to be delivered to Dr. Slaughter upon the payment by him of the money to the treasurer.

It appears, without conflict in the evidence, that Mr. Tatum was on March 1, 1933, and had been for many years prior thereto, the treasurer of the county school fund, and that he was vice-president of the Bank of LaFayette, and had the general management of the bank's affairs.

On March 1, 1933, between the hours of 1 and 2 p.m., Dr. Slaughter went to the Bank of LaFayette, and at that time Mr. Tatum delivered to him the note sued on, and at the same time wrote out a check on the bank in the sum of $1,500, which Dr. Slaughter signed, and delivered to Mr. Tatum for the note. This check was made payable to the Chambers county board of education. This entire transaction occurred within about an hour and an half before the bank closed on that day. The usual hour of closing of the bank was 3 p.m.

On March 1, 1933, a bank moratorium was declared, notice of which reached the officers of the bank after the bank had closed on that day. After March 1, 1933, the bank never opened again except on a restricted basis, and soon thereafter it was placed in liquidation.

At the time Dr. Slaughter gave his check to Mr. Tatum, he had on deposit in the bank subject to his check about $3,100, and since the closing of the bank Dr. Slaughter has received dividends amounting in the aggregate to $389.12, which represent 12 1/2 per cent. of the total amount he had on deposit at the time the bank closed on March 1, 1933. In paying this dividend, no account was taken of the check for $1,500.

It further appears, without dispute in the evidence, that the check given by Dr. Slaughter to Mr. Tatum was not presented for payment before the bank closed on March 1st. Mr. Tatum on this point testified that he put the check in his pocket; that it could not be paid until indorsed by the president and secretary of the board of education. This was not done.

The testimony further shows that had the check been properly indorsed and presented on March 1, 1933, for payment, it would have been paid. The testimony further shows, without dispute, that no entry was made on the books of the board of education, or of the bank, of the check. That the proceeds of the check were never placed to the credit of the board of education in the bank, nor was the check charged to the account of Dr. Slaughter in the bank; that the balance to his credit remained the same in the bank as though the check had not been drawn. The evidence, in short, shows that the check was never paid, and that the board of education, in fact, did not receive one penny from the transaction.

The court below evidently proceeded upon the theory that the question of liability hinged upon whether the board of education, or the treasurer of the county school funds were negligent in not presenting the check for payment on the day it was drawn and delivered to the treasurer. It was upon this issue that the court submitted the case to the jury.

It is not controverted that the county board of education had the authority for legitimate purposes to borrow money, and pledge the three-mill school tax accruing to the different school districts for the repayment of the loan. Nor is it insisted that the loan that the board of education undertook to secure from Dr. Slaughter was not authorized by law.

The defendant's contention is, in the main, that the loan was never, in fact consummated, and that the note sued on was without consideration.

The contention of the plaintiff, appellee, is that the loan was concluded, when Dr. Slaughter, under the facts in the case, gave to the treasurer of the county school funds his check; that the treasurer had the authority, and was under the duty, to indorse the check, and in view of his knowledge of the condition of the bank, it was his duty to make immediate presentment to the bank for payment. That, under the facts of the case, the acceptance of the check was payment for the note, and if the delay in presenting the check resulted in loss, that loss must be borne by the board of education, and not by Dr. Slaughter.

In the consideration of this case we are not unmindful of the fact that the payee of a check is under duty to the drawer to make due presentment, and laches in the observance of this duty, resulting in loss to the drawer (to the extent of such loss), would operate, pro tanto, as satisfaction of the original debt. Marx & Co. v. Bankers' Credit Life Ins. Co., 224 Ala. 249, 139 So. 421; Deal v. Atlantic Coast Line R. Co.,

225 Ala. 533, 144 So. 81; Hendricks v. Jefferson County Savings Bank, 153 Ala. 636, 45 So. 136, 14 L.R.A. (N.S.) 686; Lowenstein v. Bresler, 109 Ala. 326, 19 So. 860; Morris v. Eufaula National Bank, 106 Ala. 383, 18 So. 11; Newell Contracting Co. v. Lacy, 229 Ala. 208, 155 So. 379.

And ordinarily, the payee will make the check his own, if he does not present it for payment within the time permitted by law; the drawer having the funds in the drawee bank out of which the check could be paid, and had it been duly presented. Marx & Co. v. Bankers' Credit Life Ins. Co., supra; Deal v. Atlantic Coast Line R. Co., supra; Lowell Co-operative Bank v. Sheridan, 284 Mass. 594, 188 N.E. 636, 91 A.L.R. 1176; Furber v. Dane, 203 Mass. 108, 112, 89 N.E. 227.

We do not think, however, that this rule has application in the case now before us, no matter what may be the legal rights, if any, of the plaintiff against Mr. Tatum, personally.

The county board of education is a quasi corporation, a governmental agency, created by law,...