First Nat. Bank v. Filer

Citation145 So. 204,107 Fla. 526
PartiesFIRST NAT. BANK OF KEY WEST v. FILER et al.
Decision Date02 January 1933
CourtUnited States State Supreme Court of Florida

Rehearing Denied Jan. 18, 1933.

Error to Circuit Court, Dade County; Uly O. Thompson, Judge.

Suit by the First National Bank of Key West against H. H. Filer and others. Judgment for defendants, and plaintiff brings error.

Affirmed in part, and reversed in part, and remanded, with directions.

COUNSEL

Loftin, Stokes & Calkins, of Miami, for plaintiff in error.

Philip Clarkson, of Miami, for defendants in error.

OPINION

PER CURIAM.

This was a suit at law brought by the holder of certain promissory notes issued by the board of public instruction of Dade county, Fla., to charge the members of the board issuing them with personal or individual liability thereon. Demurrer was sustained to both counts of the declaration setting up the alleged liability. This writ of error was taken by the plaintiff below to the final judgment consequently entered on the demurrer that had been sustained to the declaration.

One of the notes in controversy is in words and figures as follows:

'No 2 $2,000.00

Miami Florida,

September 26, 1926.

'On or before One (1) Year after date, for value received, We promise to pay to the order of Whitphel Properties, Inc., two thousand and no/100 dollars Payable at City National Bank &amp Trust Company of Miami, Florida, with interest thereon at the rate of eight per cent. per annum from date until paid. Interest payable semi-annually. The maker and endorser of this note further agree to waive demand, notice of non-payment and protest, and in case suit shall be brought for the collection hereof, or the same has to be collected upon demand of an attorney, to pay reasonable attorney's fees for making such collection. Deferred interest payments to bear interest from maturity at eight per cent. per annum, payable semi-annually.

'This note is secured by mortgage on Block 3 of Kensington Park Seventh Street Addition

'[Sgd] The Board of Public Instruction for the County of Dade, State of Florida

'By Chas. M. Fisher, Secretary. [Seal.]

'[Official seal of the Board of Public Instruction for Dade County, Florida, affixed.]'

The other notes sued on were substantially the same in tenor and effect.

The two counts of the declaration were to the following effect in substance:

'First Count.

'That defendants during the year of 1926 constituted the School Board of Dade County; that in September, 1926, the defendants, acting as members of said Board, purchased and acquired a school site without first having made request of the county commissioners of Dade County to contract a debt for the purchase of school site and without an affirmative vote of the qualified voters being first had and obtained, and without the county commissioners having authorized or made any provision for the contracting of a debt to purchase said school site, as required by section 509 of C. G. L. 1927; that, in part payment for said school site the defendants directed, without first having complied with said Section 509, the execution and delivery, at one and the same time, in the name of the School Board, by the Clerk of the Board, of three notes for $2,000 each; that at the time of the purchase of said site and at the time defendants directed the notes to be delivered and at the time said notes were delivered the defendants knew that said Section 509 had not been complied with; that the party to whom said notes were delivered assigned the same to J. W. Leon and J. W. Leon in turn assigned the same to the Bank before maturity for $5,400; that the bank is the holder and owner of said notes; that at the time the Bank acquired said notes it did not know that said section 509 had not been complied with; that said notes were presented to the School Board for payment and refused, and then presented to the defendants for payment and refused; that said notes have never been paid, and the Bank claims $6,000 damages.

'Second Count.

'That defendants during 1926 constituted the Board of Public Instruction for Dade County and received compensation as such; that during 1926 the defendants, as constituting said board undertook to acquire for the board a certain tract of land in Dade County as a site for a school building without first having complied with section 509 of the Compiled General Laws of Florida 1927; that in part payment thereof the defendants, during September 1926, without having first complied with said section 509, and knowing same had not been done, wilfully directed the delivery by the clerk, in the name of the board, of three negotiable promissory notes for $2,000 each; that on September 26, 1926, said notes were so executed and delivered; that at the time of the attempted purchase of said school site and at the time said notes were directed to be executed and delivered by defendants, the defendants knew that said board had not complied with said section 509; that said notes purported to have been made by said board and purported to be regular and genuine obligations of the board, with the seal of the board affixed, and that the Bank believed when it acquired them that said notes were regularly made and executed by said board and that they were good and valid obligations of said board, and relied thereon; that before maturity of said notes the Bank purchased said notes and paid the sum of $5,400 therefor; that the Bank did not discover until after the maturity of said obligations that the defendants attempting to act as said board had not complied with said section 509; that said notes were presented to said board for payment and refused, and then presented to defendants and payment refused; and the Bank claims damages for the amount it paid for said notes and interest on such sum.'

It thus appears that the declaration showed, generally, that the board of public instruction of Dade county bought a school site without first complying with section 509, C. G. L., section 436, R. G. S., that in part payment therefor the board gave the vendor its promissory notes executed under its corporate name and seal, by its secretary, and that such notes came into the hands of the plaintiff bank, for value, before maturity, as indorsee thereof.

Therefore the two propositions of law arising on this appeal are: (1) Are the individuals who composed the board of public instruction that undertook to issue the unauthorized notes, personally liable in assumpsit thereon to a bank that subsequently became an indorsee of such notes; and, if not (2) are the individual members of the board of public instruction so issuing the promissory notes without authority to contractually bind the school board thereby, personally liable in tort to the indorsee bank, because of their unauthorized, if not unlawful, act in undertaking to have issued and put into circulation negotiable notes that the board of public instruction itself had no lawful authority to executed?

That all of the notes here sued on were invalid and unenforceable at law, against the board of public instruction, has been decided by this court. See First National Bank of Key West v. Board of Public Instruction for Dade County (Fla.) 145 So. 203 (decided at this term). See, also, Babcock v. Board of Public Instruction for Dade County (Fla.) 140 So. 644.

Disposing of the asserted liability in assumpsit first, we find that the names of none of the individual defendants appear on the notes sued on. The general rule is that, the names of the defendants not appearing on promissory notes sued on, the defendants cannot be held liable on the notes, as if makers thereof, in the absence of some special showing that the signature that does appear on the notes was the result of some personal act of signing done by the defendants toward their execution and issuance in the form in which they appeared signed in the board's name. Section 6778, C. G. L., section 4692, R. G. S., Daniel on Negotiable Instruments (5th Ed.) § 303; Henry Pilcher's Sons, Inc., v. Martin, 102 Fla. 672, 136 So. 386. So the demurrer to the first count of the declaration was properly sustained.

But, as to the second count, the demurrer should have been overruled.

Whenever there is a wrong there is a remedy. And the general test to determine whether there is a liability in an action of tort, is the question whether the defendant has by act or omission disregarded his duty. This applied to public officers who may become liable on common-law principles to individuals who sustain special damages from the negligent or wrongful failure to perform imperative or ministerial duties. Dillon on Municipal Corporations (5th Ed.) vol. 1, p. 762; 22 R. C. L. pars. 160-162, pp. 483, 484.

This court has recently stated in no uncertain terms that public officers must use due diligence in discharging their duties particularly where rights of individuals may be jeopardized by their neglect. And, in the case referred...

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