Toler v. Love

• Decision Date: 14 May 1934
• Docket Number: 31176
• Court: Mississippi Supreme Court
• Parties: TOLER et al. v. LOVE, SUPERINTENDENT OF BANKS et al

154 So. 711

170 Miss. 252

TOLER et al. v. LOVE, SUPERINTENDENT OF BANKS et al

No. 31176

Supreme Court of Mississippi

May 14, 1934

Division B

1 EQUITY.

Maxim that he who seeks equity must do equity will not be applied where to do so would defeat a public policy of the state.

2 COUNTIES.

Compliance with statutory conditions is essential to establishment of liability against a county.

3 OFFICERS.

One contracting with a public officer must take notice of the extent of his authority, and where contract with him violates public policy it cannot be enforced.

4. SCHOOLS AND SCHOOL DISTRICTS.

Bank, which advanced funds with which school district purchased land for teachers' home, took trust deed to secure loan, and collected interest thereon without petition or election by qualified voters as required by statute, held accountable in representative suit by taxpayers for interest collected and without any rights against school district since loan was void (Code 1930, sections 5977, 5978, 5981, 6630, 6643).

HON. T. PRICE DALE, Chancellor.

APPEAL from chancery court of Lawrence county HON. T. PRICE DALE, Chancellor.

Suit by H. T. Toler and others against J. S. Love, Superintendent of Banks, and others. From a judgment dismissing complainants' bill of complaint, complainants appeal. Reversed and remanded.

Reversed and remanded.

C. E. Gibson, of Monticello, for appellants.

The very moment the deed to the property involved in this law suit was delivered to the trustees, it became a part and parcel of the Oakvale consolidated school district, and the trustees, in the absence of statutory authority, were without authority to encumber it, and their efforts to do so were and are void.

The appellants in this case are not estopped under the doctrines of "he who seeks equity do equity."

Sections 5978, 6622, 6642 and 6643, Code of 1930; Town of Farmerville v. Commercial Credit Co., 136 So. 82; Board of Public Instruction of Lafayette County et al. v. Union School Furnishing Co., 129 So. 824; Cleveland School Furniture Co. v. City of Greenville, 41. So. 862; Town of Coffee Springs et al. v. Glover, 65 So. 440; J. E. Moss Iron Works et al. v. Jackson County Court et al., 89 W.Va. 367; 26 A. L. R. 319; 59 Miss. 198; 90 So. 243; U. S. F. & G. Co. of Baltimore, Md. et al. v. Marathon Lbr. Co., 81 So. 492; Smith County v. Mangum, 89 So. 913; 60 S.C. 465, 85 Am. St. Rep. 865; Woods v. Campbell, 40 So. 874, 87 Miss. 782; Young v. Ashley et al., 86 So. 458, 123 Miss. 693; 88 Miss. 633, 117 A. S. R. 758; 10 R. C. L., sec. 132; 21 C. J. 1191, 1194, 1195, 1214; City of Bay St. Louis v. Board of Supervisors of Hancock County, 32 So. 54; Claiborne County v. Walter Brooks, 28 L.Ed. 470; Wells v. Board of Supervisors of Pontotoc County, 26 L.Ed. 122, 51 So. 802; 21 So. 247, 74 Miss. 435; 36 L. R. A. 798, 60 Am. St. Rep. 516.

It is a fundamental principle that a governmental corporation is not estopped by the act of an officer in cases where the act is beyond the scope of his authority.

Union. School v. Crawfordsville First National Bank, 102 Ind. 464, 476, 2 N.E. 194, 137 Ind. 427, 37 N.E. 328; Moody, Judge of Probate v. Terrell-Hedges Co., 78 So. 639; Chapman et al. v. Board of County Com., 107 U.S. 348, 27 L.Ed. 378.

Flowers, Brown & Hester, of Jackson, for appellees.

The trustees were met at the threshold with the proposition that "he who seeks equity must offer to do equity." But they contended that this equitable maxim did not apply to the state and its governmental subdivisions, but our court in the Vernon case, 47 Miss. 181, and in the Mallery case, 54 Miss. 499, and the Supreme Court of the United States, in the Chapman case, 107 U.S. 348, 27 L.Ed. 378, hold that this maxim does apply as against the government and governmental subdivisions.

U. S. v. White, 17 F. 561; Rock County v. Weirick, 128 N.W. 94, 143 Wis. 500; Fredrick v. Dayton County, 96 Wis. 411, 71 N.W. 798.

He who seeks equity must do equity.

McGee v. Wallis, 57 Miss. 638, 34 Am. Rep. 484; Stewart v. Brooks, 62 Miss. 492; Newman v. Taylor, 69 Miss. 670, 13 So. 831; Bowdre v. Carter, 64 Miss. 221, 1 So. 162; Dewis v. Robertson, 64 Miss. 196, 1 So. 159; Hamilton v. Halpin, 68 Miss. 99, 8 So. 739; Duncan v. Moore, 67 Miss. 136, 7 So. 221, 88 Miss. 633, 41 So. 369, 117 A. S. R. 758, 9 Ann. Cas. 1; Young v. Ashley, 123 Miss. 643, 86 So. 458; Parchman v. McKinnery, 12 S. & M. 631; American & C. Mortgage Co. v. Jefferson, 69 Miss. 770, 12 So. 464, 30 Am. St. 587; Durr Co. v. Mitchell, 52 So. 583; 10 R. C. L., sec. 141, page 392; Corby v. Bean, 44 Mo. 379; Kinney v. Consolidated Virginia Min. Co., 4 Sawy. 382; Elder v. First National Bank, 12 Kan. 238; Robinson v. Sullivan, 102 Miss. 581, 59 So. 846; Prestridge v. Hazan, 132 Miss. 168, 95 So. 837; Grenada Bank v. Young, 139 Miss. 448, 104 So. 146.

OPINION

Ethridge, P. J.

H. T. Toler, N. A. Ward, W. C. Williamson, and O. N. Ward, filed a bill in the chancery court of Lawrence county against the Bank of Monticello, J. M. Bass, the liquidating agent of said Bank of Monticello, J. S. Love, Superintendent of the banking department, and M. M. Neal, alleging that the complainants H. T. Toler and W. C. Williamson are residents of Jefferson Davis county, and that N. A. Ward and O. N. Ward are residents of Lawrence county, and that they are citizens, patrons, and taxpayers in the Oakvale consolidated school district, and are, therefore, interested parties to file this bill, as well as for and on behalf of all the other patrons and taxpayers in said district. The bill also alleged that the Bank of Monticello is a banking corporation now in liquidation by the state banking department, and that J. S. Love is the state superintendent of banks; that W. E. Hathorn, E. C. Bryant, H. J. Bourn, Zollie Daniels, and Knox Polk, as trustees of the Jefferson Davis Lawrence school district, executed a deed of trust to A. C. Brinson as trustee for the Bank of Monticello to secure a loan of one thousand thirty-five dollars and thirty-three cents, giving a deed of trust dated September 4, 1929, on the property described in the bill, which was alleged to be school property. Thereafter, on January 6, 1931, the Bank of Monticello was closed and its affairs, as stated, were turned over to J. S. Love, superintendent of banks, and are being administered under his direction. That on the 12th day of July, 1932, J. S. Love appointed M. M. Neal as trustee instead of A. C. Brinson, and that said M. M. Neal proceeded to advertise the land described in the bill for sale to be sold on the 22d day of August, 1932; that the property on which said security was given is a part and parcel of the property owned by the Oakvale consolidated district, and that the trustees were without authority to incumber the property of said school district, which is a taxing district supported and operated, in whole or in part, by taxes levied and collected in said district; and that the debt contracted by the board of trustees with the Bank of Monticello is an interest-bearing debt, and that no election was hold in said district authorizing the incurring of said debt by said trustees, as required by law, and it was not, therefore, authorized by a majority of the electors of said district. It is further alleged that before said Bank of Monticello closed its doors for liquidation it had collected four hundred dollars on said indebtedness, and that said collection was illegally made and should be refunded to said Oakvale consolidated school district.

Complainants allege that since the deed of trust is void it, in no wise, conveyed any title to the trustee, and none can be conveyed by the trustee at any sale made thereunder, but, if sold, it would cast a cloud upon the title of said property of said Oakvale school district, and that said deed of trust should be canceled and held for naught; the debt contracted by said board of trustees should likewise be canceled; and that the state banking department should be required to refund to said school district the amount illegally paid on said indebtedness, to-wit, the sum of four hundred dollars.

It appears from the record that F. L. McGahey and his wife, Felton McGahey, on September 4, 1929, executed a warranty deed to W. E. Hathorn, E. C. Bryant, Zollie Daniel, H. J. Bourn, and Knox Polk, as trustees of the school district, and their successors in office, conveying the land described in the bill, which deed was recorded on September 7, 1929, and on September 6, 1929, an order was signed by the trustees directing a pay warrant issued to Dr. F. L. McGahey for one thousand dollars, to purchase a teachers' home, payable out of the school funds, which sum was paid. It further appears that the trustees deposited the one thousand dollars received from the Bank of Monticello to the credit of the school funds, and that at the time this deposit was made there was eighty dollars and some cents to the credit of said school fund, and that this money received from the bank was paid out to Dr. McGahey as above stated.

There is no pretense that there had been an election by the voters of the district authorizing said loan, or a petition signed by a majority of the qualified electors directing the trustees to make said loan.

By section 5978, Code 1930, it is provided that no interest-bearing debt, except as provided in section 5977, Code 1930, shall be incurred in any county, municipality, or other taxing district, unless authorized by a majority of the electors in an election called for that purpose; but that...