Opinion
No. 34193.
October 28, 1940.
1. SCHOOLS AND SCHOOL DISTRICTS.
In action aganist county superintendent of education and surety on his official bond to recover face value of pay certificates issued by superintendent to plaintiff's assignors, proof that some kind of budget was made and filed at some indefinite time, nature of which was so obscure as to render record practically unintelligible, was insufficient to uphold a judgment on such certificates (Laws 1936, chap. 255, secs. 4, 14).
2. SCHOOLS AND SCHOOL DISTRICTS.
A surety on bond of county superintendent of education could not disclaim liability on ground that bond was executed several months prior to effective date of statute imposing upon superintendent a penalty for issuing pay certificates in excess of the budget, where duties and liabilities imposed by such statute were in no way different from those imposed by law existing at time bond was executed (Code 1930, sec. 6732; Laws 1936, chap. 255, sec. 14).
3. ASSIGNMENTS.
Generally, a right to recover a penalty is not assignable.
4. SCHOOLS AND SCHOOL DISTRICTS.
An assignee of pay certificates issued by county superintendent of education was not precluded from maintaining action on superintendent's official bond, on ground that action was to recover a penalty which was not assignable where statutes conferred right to sue upon holders of such certificates and fixed liability of superintendent on bond to holders of certificates, and assignee was the "holder" of such certificates (Code 1930, sec. 6732; Laws 1936, chap. 255, sec. 14).
5. SCHOOLS AND SCHOOL DISTRICTS.
Statute imposing a penalty on county superintendent of education and his surety for issuing pay certificates in excess of budget is highly penal and must be strictly construed against penalty (Laws 1936, chap. 255, sec. 14).
6. SCHOOLS AND SCHOOL DISTRICTS.
In order to recover penalty on pay certificate issued by county superintendent of education in excess of budget, burden is on holder of certificate to establish by competent evidence that issuance of particular certificate was at that time in violation of statute, and that certificate was then in excess of funds received for fiscal year and not the funds on hand at date of its issuance (Laws 1936, chap. 255, sec. 14).
7. SCHOOLS AND SCHOOL DISTRICTS.
Under statute prohibiting county superintendent of education from issuing pay certificates to teachers, school carriers or other persons in excess of amount received on account of public schools for current fiscal year, or in excess of budget estimates for current fiscal year, legislature did not intend to have the schools operate a month more or less and close down until funds allocated were actually paid into the county treasury (Laws 1936, chap. 255, sec. 14).
APPEAL from the circuit court of Covington county; HON. EDGAR M. LANE, Judge.
W.U. Corley, of Collins, for appellants.
Where sureties on the official bond of an officer executed the same under a law which clearly defined the duties of the office and while the officer is still an incumbent of the office the legislature passes a special act adding to the office duties wholly different in their nature from the office duties at the time of the execution of such bond, the sureties are not liable for the defaults of the officer in discharging the duties of the special act, even though the act provided the officer shall be responsible for the performance of such added duties on his official bond.
Denio et al. v. Warren County, 60 Miss. 949.
The bond of a public officer is a security not only for the performance of the duties incumbent on him when the bond was executed, but for such other duties, not different in kind, which the legislature may thereafter impose on him.
State ex rel. v. Hundley, 87 So. 890; County of Spokane v. Allen, 9 Wn. 229, 43 A.S.R. 830.
The added duties were not germane to the office at the original time, and hence no liability afterwards. The budget or finances at all times had been with the board of supervisors and state distributions; their judgments prevailed over it all, and at all times, and a budget advanced by him could not affect the finances in any way, hence this alone is not germane to the office, never had been so considered.
24 Am. Eng. Ency. of Law, 881; LaFayette v. James, 92 Ind. 240; Miller v. Stewart, 9 Wheat. 680; White v. East Saginaw, 43 Mich. 567; 29 Cyc. 1460; People v. Thompkins, 74 Ill. 482; Reynolds v. Hall, 2 Ill. 35; Commissioner v. Holmes, 25 Va. 771; 12 Cyc. 1057; First Nat. Bank v. Gerke, 68 Md. 449; Spokane County v. Allen, 43 A.S.R. 830; Denio v. State, 60 Miss. 949; Nat. Surety Co. v. U.S., 129 Fed. 70; St. Mary's v. Rowe, 15 Ohio Dec. 686; Smith v. U.S., 170 U.S. 372; Gaussen v. U.S., 97 U.S. 584; Monroe County v. Clark, 92 N.Y. 391; People v. Thompkins, 74 Ill. 482; Salem v. McClintock, 16 Ind. 655, 46 N.E. 39, 59 A.S.R. 330; Drach v. Chenney, 52 Mo. 258.
The purpose of the statute in making the superintendent responsible on his bond for the face value thereof to purchasers is to protect purchasers against fraud of the superintendent in issuing them.
McDonald Sons v. McQueen, 194 So. 473.
The instruction shown at page 207 of the record is certainly erroneous. It told the jury that all she had to do was to present the pay certificate, that if there were no available funds at the time she presented it, they should find for the plaintiff. The law is not to issue certificates in excess of the available funds for the fiscal year. Cash was still coming into the treasury for that fiscal year from land redemptions; back taxes, etc. Besides, the greater portion of the entire receipts came in after the issuance of all these pay certificates.
Butler Snow, of Jackson, for appellant, National Surety Corporation.
Appellee did not prove that the certificates sued on were certificates issued in excess of the money received on account of the public schools for the current fiscal year or in excess of the budget estimates for that year.
By her declaration, appellee undertook to recover of the superintendent of education and his surety for certificates issued by the superintendent "in excess of the amount of money received on account of the public schools for the current fiscal year, or in excess of the amount of the budget estimates for the current fiscal year," for which, under Section 14, chap. 255, Laws of 1936, the county superintendent and his official bond are made liable.
But, upon the trial of the case, appellee proceeded on an entirely different theory. That is to say, she proceeded upon the theory that if there were no available funds with which to pay said certificates when presented to the chancery clerk for a warrant that she was entitled to recover.
The statute does not make the superintendent and his surety liable for issuing pay certificates in excess of the funds then in hand, nor does the statute make the superintendent and his surety liable because no funds are in hand at the time the certificates happen to be presented for the issuance of a warrant.
The statute is highly penal, and in order for the pay certificate holder to recover, the particular certificate must be one issued in excess of the amount received on account of the public schools for the current fiscal year, or in excess of the budget estimates for that year.
It is respectfully submitted that if, in truth and in fact, the clerk issued pay certificates in excess of the amount of money received on account of the public school funds for the current fiscal year or in excess of the budget estimates for that year, the appellee wholly failed to prove that the certificates sued on were in excess of said funds or of the budget estimates.
The statute relied on is a penal statute, and the right to recover the penalty provided for a violation thereof is a personal right and not assignable.
21 R.C.L. 211, 212; Wilson v. Shrader, 73 W. Va. 105, 79 S.E. 1083, Ann. Cas., 1916D, 886; Peterson v. Ball, 211 Calif. 461, 74 A.L.R. 187; Robinson v. St. Mary's Lbr. Co., 34 Idaho 707, 204 P. 671; Keeling v. Barnes, 106 Wis. 546, 82 N.W. 536.
It is no answer to say that the statute provides that the superintendent and his surety shall be liable to the holder of the excess certificates. Section 6570, Mississippi Code of 1930, requires the superintendent of education to issue the pay certificates direct to the teacher or bus driver, and to keep the stub as a permanent record of his office. Section 6614, Mississippi Code of 1930, requires the clerk to issue the warrant upon presentation of the certificate, in conformity with the certificate. If the pay certificate could be issued to one person and the warrant to another person, there would be no way for the superintendent or the chancery clerk to reconcile their accounts, or for the superintendent or chancery clerk to determine whether a teacher or bus driver had been paid their contractual allowance. Moreover, the section contemplates that the pay certificate shall be presented by the teacher or driver, and requires that the warrant issued thereon shall show the month and term in which the service was rendered by the teacher, for which payment is made.
By the following instruction, "The court charges the jury for the plaintiff that if they believe from the evidence that plaintiff presented said pay certificates sued on to the chancery clerk of said county for payment as she testified to and as the chancery clerk and his deputy testified to, she complied with the law, and if they further believe from the evidence there was no money available with which to pay said certificates when so presented to the chancery clerk, for a warrant to be issued by the clerk on the County Common School Fund, it is the sworn duty of the jury to find for the plaintiff," the lower court authorized the jury to find for the plaintiff if there was no money available when the certificates were presented to the chancery clerk for a warrant. This instruction is erroneous.
E.L. Dent, of Forest, for appellee.
The case of Trantham et al. v. Russell, 171 Miss. 481, 158 So. 143, is similar to the case at bar, except that Section 6732, Code of 1930, on which that case was based, included only pay certificates issued to teachers, but did not include pay certificates issued to school carriers or truck drivers, whereas, the case at bar is based on pay certificates to school teachers and school carriers, as authorized by Section 14, Chapter 255, General Laws of Mississippi, 1936. In the Trantham case, among other things, this court said: "So far as the teachers' pay certificates are concerned, we are unable to see any escape from liability of the superintendent on his official bond under Section 6732 of the Code. It simply provides, in unmistakable language, that for teachers' pay certificates issued in violation of the statute, as these were, the superintendent shall be liable on his official bond to the holders, etc. Good faith and mistaken judgment are no defense. With such liability, there also goes 6 per cent. interest per annum on the amounts of the certificates from the time they were due. Section 1946, Code of 1930. The trial court so adjudged."
With reference to Chapter 255, General Laws of Mississippi, 1936, as challenged by the demurrers to be unconstitutional, against public policy, etc., in that this act materially changes and increases the duties, responsibilities and penalties of the bond, which were not included in the bond, or contemplated by appellants, on this point we respectfully call the court's attention to the following authorities:
State ex rel. Berry, District Attorney, v. Hundley et al., 125 Miss. 355, 87 So. 890, where this court said: "An official bond is security, not only for the performance of the duties incumbent upon the officer when executed, but for such other duties, not different in kind, which may be thereafter imposed by the Legislature upon him. Denio v. State, 60 Miss. 949; 22 R.C.L. 503; 27 Am. Eng. Enc. Law (2 Ed.), 542."
Appellants took the office "cum onere," with all responsibilities attached, and this includes the authority of the legislature to prescribe liability for malfeasance in office, 46 C.J. 1035. When the bond was executed, the issuance of pay certificates was a part of the duties of the office, and the only change in the statute was to include liability for "school carriers and other persons" the same as pay certificates to teachers. This was germane to the duties of the office, and not different in kind, which duties the Legislature may impose, and when the amendment was made in March, 1936, the appellant, surety, took no steps to be relieved of the penalty of the bond, although the law imputed to it knowledge of the amendment, and to wait until the bond is brought in suit, it appears that the doctrine of estoppel should apply, and appellants should have no right to question the constitutionality of the Act of the Legislature, after enjoying the privileges and emoluments of the office.
Under Section 14, Chapter 255, General Laws of Mississippi, 1936, it will be observed that "the holders of such certificates," not assignees, may recover. In fact, the statute makes such certificates "illegal and void," as to all parties except the county superintendent and his official bond, and as against them the holders of the certificates may recover.
Trantham et al. v. Russell, 171 Miss. 481, 158 So. 143.
Under this statute no question of assignment is involved, because the statute in unmistakable terms says, "the holders of such certificates." To hold otherwise would be to defeat the intent of the legislature, and to deprive the teachers and bus drivers of the privilege of paying board, as is often done, and the bus drivers from obtaining oil and gasoline, as was done in the case at bar, by hypothecating such certificates. Therefore, if we are correct in this, the authorities cited by appellant on the question of penalty and assignment are not applicable. We think the case of Trantham et al. v. Russell, 171 Miss. 481, 158 So. 143, clearly settles this question, as Russell does not appear to have been a teacher or bus driver but "acquired the certificates in due course for a valuable consideration after the expiration of the 1931-32 scholastic year." Evidently, the legislature intended to place some value in the certificates in the hands of the holders, even though void as to all others, and the holders would acquire a right to sue by virtue of Section 505, Code of 1930.
Complaint is made with reference to the instructions granted appellee. We respectfully submit that when all the instructions are considered together, it will be found that appellants' instructions were most favorable and there is no material conflict.
This was an action at law wherein Mrs. Rogers sought to recover from George A. Newton, County Superintendent of Education of Covington County, and the National Surety Corporation, surety on his official bond, the face value of certain certificates issued by Newton as County Superintendent to various parties of which Mrs. Rogers became the owner for a valuable consideration.
The issues were made up after separate demurrers had been filed and overruled in the court below. The evidence was submitted to the jury and a verdict returned for the full amount sued for, with six per cent interest thereon to date of verdict, and the court below entered judgment accordingly.
The action is based upon a paragraph of Section 14, Chapter 255, Laws 1936, which appears on its face to be amendatory of Sections 6739, 6740, Code of 1930. The entire Act is lengthy and consists of twenty-two sections. The exact language of the applicable part of Section 14 relied on for recovery is as follows: "And it shall be unlawful for any county superintendent of education to issue pay certificates to teachers, school carriers, or other persons, in excess of the amount of money received on account of the public schools for the current fiscal year or in excess of the budget estimates for the current fiscal year, and any certificate so issued shall be illegal and void; but the county superintendent shall be liable on his official bond to the holders of such certificates for the face value thereof."
That which preceded the above quotation from Section 14 made it unlawful for the county superintendent to incur obligations in excess of the available school funds, or in excess of the budget for the fiscal school year.
That which follows made the violation of the provisions of this Act a misdemeanor for the county superintendent to make contracts with teachers or school carriers, or to incur indebtedness in excess of the available funds, or the budget estimate for that year, or issue pay certificates in excess of the amount of money received or in excess of the budget estimate.
By statute, the fiscal year for public schools begins July 1st of a year and ends thereafter on June 30th.
The pay certificates were issued to designated teachers and school carriers beginning in November 1937, the third month of the school term, and continued at intervals to May, 1938. There were seven pay certificates issued by the county superintendent to school teachers aggregating $175.16, and forty such certificates were issued to school carriers aggregating $1,242.05.
The evidence shows that Mrs. Rogers acquired these certificates by advancing their value to the payees, and that she was assignee thereof. It further appears that Mrs. Rogers presented the certificates to the chancery clerk and was refused warrants therefor on the ground that there were no funds in the county depository with which to pay them.
The county superintendent was required to prepare and file a detailed budget of expenditures for the support, maintenance and operation, and at the same time, he was required to file a detailed statement of the revenue from all sources, including amounts to be received from the state common school fund, the state equalizing fund, county school tax levy and poll tax collections, and balance of money on hand to the credit (in the county treasury) of the common school fund. See Section 4, Chapter 255, Laws 1936.
(1) When the above mentioned budget was filed with the state superintendent, the latter had the option to approve it or not or have it revised, conditioned upon his estimate of revenue, in writing, certified to the county superintendent. When approved by the state superintendent, it became the duty of the county superintendent to file a copy thereof with the board of supervisors, and thereupon it became the duty of that board to have the budget entered upon its minutes.
The proper evidence of the budget was the minutes of the board of supervisors. There is some evidence that some kind of budget was made and filed at some indefinite time, but the nature is so obscure as to render this record practically unintelligible, and the proof is insufficient to uphold a judgment thereon.
(2) Newton's bond, as county superintendent, appears to have been executed on the 29th day of November 1935, and his surety, National Surety Corporation, was approved December 5, 1935. The bond was for $3,000 and contains this recital: "The condition of this obligation is such, That, whereas the above bound George A. Newton was duly elected to the office of Superintendent of Education of said County on the 5th day of November, A.D. 1935, for the term of four years, from the 6th day of January, A.D. 1936, therefore, if he shall faithfully perform all the duties of said office during his continuance therein, then the above obligation to be void, otherwise to remain in full force and virtue."
Newton entered upon, and was at the time of the issuance of the certificates engaged in, the discharge of the duties of the office.
It is insisted that the official bond was executed and in force months before the statute was enacted, especially Section 14; and that by enforcement thereof an additional burden is placed upon the surety which did not exist at the time the bond was executed and went into effect when Newton took over the office; and these additional burdens, duties and liabilities placed upon the principal-official are different in kind from those theretofore imposed.
Liability is sought in the case at bar on Section 14 of the Act, and especially on the language of the part thereof above set forth, supra.
Referring to Section 6732, Code of 1930. Liability was imposed on the county superintendent in these words: "It shall be unlawful for the superintendent to issue pay certificates to teachers in excess of the amount of money received on account of the public schools for the current year and any certificate so issued shall be illegal and void; but the superintendent shall be responsible on his bond to the holders for face value of such certificate and shall be so liable to any person whom he may cause to teach in a public school and for whose payment there is no money in the treasury."
Progressively, the Legislature has been enlarging, in detail, the duties of a county superintendent, as to the form of budget and procedure as to the budget, but for the first time there is found in Section 14 the penalty prescribed and imposed upon the county superintendent as to his exceeding the budget, and includes therein a penalty for issuing certificates to common school carriers in excess of the budget estimate for the scholastic year. The penalty imposed is for the issuance of certificates to teachers in excess of funds received during the fiscal year. See Section 6732, Code of 1930. In addition thereto, such penalty for the issuance of certificates in excess of the budget and to carriers was added by Section 14.
In Trantham v. Russell, 171 Miss. 481, 158 So. 143, it was pointed out that the carriers were not included in Section 6732 of the Code.
We do not think the duties and liability of the superintendent imposed by Section 14 are in any way different in kind from those imposed by law theretofore, the superintendent and his surety were bound not only for the performance of the duties incumbent when the bond was executed and became effective; but for such other duties, not different in kind, which was thereafter imposed, see State ex rel. Berry v. Hundley, 125 Miss. 355, 87 So. 890, and authorities there cited.
(3) It is insisted that Mrs. Rogers, as assignee of the several certificates, could not maintain this suit on the bond because it is to recover a penalty and not assignable, and the right is personal to the payee of the certificate.
The general rule is that a right to recover a penalty is not assignable. 21 R.C.L. 211, section 6. The right to sue is governed by the language of the statute.
Upon whom does this Section 14 confer the right to recover this penalty? The statute confers that right to sue upon the holders of such certificates. It fixes liability of the county superintendent on his bond for the certificates so issued to the holders thereof. Unquestionably, Mrs. Rogers, as assignee, was the holder of these certificates. See Anderson v. Moore Dry Goods Co., 152 Miss. 312, 119 So. 914.
The language of Section 6732 of the Code strongly supports this view as to the issuance of certificates to school teachers. This Court has said as to said section: "And the purpose of the statute in making the superintendent responsible on his bond for the face thereof to purchasers is to protect purchasers against the fraud of the superintendent in issuing them." See McDonald Sons v. McQueen (Miss.), 194 So. 473, 474.
(4) Appellant next asserts — Appellee did not prove that the certificates sued for were the certificates issued in excess of the money received on account of the public school's account for the current fiscal year or in excess of the budget estimate for that year.
The evidence shows that from November 1937 to June 1938 and thereafter, Mrs. Rogers presented these certificates to the chancery clerk of that county and demanded from him warrants therefor, which the clerk declined to issue because, as she was informed, there were no funds with which to pay the warrants to the credit of that fund. In this, she was corroborated by the clerk and his deputy. It further appears, however, that during the same period, other certificates of like tenor were paid out of the public school funds.
Taking the entire record, unsatisfactory as it is, we can safely say that no particular or special date is shown when a designated certificate was issued which on that date was for an amount in excess of the funds received for that account in that fiscal year.
The record does show, by an audit made by the state auditor, that there was alleged to be an excess of such certificates over the money received of about $26,000, and it may further tend to show by inference that these particular certificates were embraced in that $26,000 excess, as of June 30, 1938.
The evidence further shows that the board of supervisors drew large sums from the treasury, presumably from these funds, to pay a deficit for a former year. This, however, is not clear. The whole record is very confused and unsatisfactory.
We think the record shows further that there were available funds in the county treasury during the months of November and December 1937, and January, February and March 1938, from which these certificates could have been paid.
The verdict of the jury was doubtless the result of an erroneous instruction, given by the court at appellee's request, to the effect that if Mrs. Rogers presented these certificates to the chancery clerk for payment, and when so presented there were no funds available with which to pay them, then there was liability by the superintendent and his surety.
Whether the clerk captiously or arbitrarily declined to issue warrants for these certificates is a matter of some doubt, as he testified in effect that certain obligations were to be paid at all events.
This statute is highly penal and must be strictly construed against the penalty.
The fair meaning of the statute is that the liability is imposed upon the superintendent for the face of a certificate, which, when issued, was in excess then and there of the public school funds received during the entire year. We know that these funds come from various sources, and no certain date can be fixed for the state auditor to remit certain funds, or for the sheriff to remit the ad valorem and poll taxes. This very fact shows that this statute is for the benefit of the purchaser of certificates. Why should the school teacher or carrier of school children assign them if the money was actually in the treasury when the certificates were issued by the superintendent? The payee of a certificate could cash it without sacrifice of time or money, as easily and as readily as an assignee. Some of these certificates were issued early in the scholastic term. There was $112,000 to $114,000 received for that purpose during that fiscal year. There being only a claimed excess of $26,000, it is evident that the certificates were issued at a time when funds were available for their payment.
In order to recover the penalty on the face of such a certificate, the burden is on the holder to establish by competent evidence that the issuance of the particular certificate was at that time in violation of Section 14, and that the certificate was then in excess of the funds received for the fiscal year and not the funds on hand at the date of its issuance. It was not the design, intent or purpose of the Legislature to have these schools operate a month more or less and close down until funds allocated were actually paid into the county treasury.
This case is being sent back to be tried on principles herein announced.
Reversed and remanded.