Yerby v. Sexton

| Ala. | Jun 15, 1872

PECK, C. J.

The question presented by the argument to be decided by this court on the record in this case is, “the capacity of the plaintiff, in his own name, as county superintendent of Hale county, to bring and maintain the action, on the note sued on in this case, as the party really interested in said note.”

In doing this, the statements of the complaint are to be taken as admitted. 1st. That the note was given by the defendants, for moneys loaned to them by the trustees of the school fund of the township in said note named, called in section 577 of the Eevised Code, trustees of free public schools, in said township.

2d. That the moneys so loaned were derived from the sale of the lands of the sixteenth section in said township.

3d, That the plaintiff is, and was, at the time said note was, as alleged, transferred to him and suit brought, county superintendent of education of Hale county.

And 4th. That the persons by whom the said moneys were loaned, and to whom the note was made payable, were trustees of said township, and that the persons by whom, as alleged, said note was transferred to plaintiff, were the township trustees of the township at the time of said transfer.

1. What are known as the sixteenth sections, by the act of congress of the 2d of March, 1819, entitled “An act to enable tbe people of Alabama Territory to form a Constitution and State Government, and for tbe admission of said State into the Union, on an equal footing with the the original States,” and by the acceptance of the propositions contained in said act by the convention, for and on the behalf of the people of this State, signed at Huntsville, on the 2d day of August, in the.year 1819, were granted to the inhabitants of the respective townships for “the use of schools.” And by a subsequent act of congress of the 2d of March, 1827, entitled “ An act to authorize the legislature of the State of Alabama to sell the lands heretofore appropriated for the use of schools in that State,” the legislature of this State were authorized to sell and convey, in fee simple, the said lands, and to invest the moneys in some productive fund; the proceeds of which fund should be forever applied, under the direction of the legislature, for the use and support of schools within the several townships ; but such sales could only he made with the consent of the inhabitants of the respective townships, to be obtained in such manner as the legislature might direct. And it is provided by said act, that in the apportionment of the proceeds of said fund, each township should be entitled to such part thereof, and no more, as might arise from the moneys derived from the sale of the school lands belonging to such township. Under the authority of this latter act of congress, this State has, from time to time, legislated upon this subject, authorizing the sale of said sixteenth sections, and providing the mode and manner of obtaining the consent of the inhabitants of the townships, and by whom and upon what terms the sales should be made; how the purchase-money should be secured, collected and invested, and in what way, and by what persons or officers, the proceeds should be appropriated to the use of schools in the several townships.

The only restraints or limitations on this legislative power are, that said sales should only be made with the consent of the inhabitants, and that the proceeds of the moneys derived from such sales should net be diverted to any other purpose, but be faithfully applied to the use of schools in the respective townships.

It does not seem necessary, for the purposes of this opinion, to collate the many acts that have been passed by the legislature on this subject. As the law stood in Clay’s Digest, the sense of the inhabitants, and the sales of 16th sections, were obtained and made by school commissioners of the several townships, and the notes of the purchasers were made payable to the president and directors of the State bank, or any branch thereof. The said bank and branches received said notes, and collected the same as other debts, according to the common course of law, and a payment at any other place was not deemed a good and valid payment.

Not only were these notes placed in said banks, but all moneys belonging to said sections that then were, or might be afterwards, received by said commissioners, were to be paid into said banks, and said banks were required to pay to said commissioners annually eight per cent, interest, and no more, upon the school funds deposited with them, which was to be applied by said commissioners to the use of schools in their respective townships.

Under the Code of 1852, three school trustees were elected in each township, and the office of school commissioners seems to have been abolished; and these trustees held elections to ascertain the sense of the townships as to the sale of sixteenth sections, and when a sale was voted, sold the same at public auction; and the notes for the purchase-money were made payable to the State of Alabama, and not to said banks, for the use of the particular township. These notes were to be deposited, by the judge of probate of the proper county, in the office of the State comptroller, and if not paid within six months after maturity, were to be placed in the hands of the attorney-general for collection; and the money, when collected, was paid to the treasurer of the State.

The governor, from time to time, issued to the several townships certificates of State stock, showing the amount received for each township, to bear interest from the first day of October of each year. This stock, after it was registered by tbe secretary of state, was transmitted to tbe probate judge of the proper county, copied by him in a book kept for that purpose, and then the original certificates were delivered by said judge to the trustees of the township, and the interest on this stock was paid to said trustees of the townships by the county treasurer, and by them applied to the use of schools in the several townships.

Then followed the acts of the 17th of February, 1854, the 14th of February, 1856, and of the 6th of February, 1858. The first of these acts is entitled “An act to establish and maintain a system of free public schools in Alabama;” the second, an act entitled “An act to render more efficient the system of free public schools in the State of Alabama;” the third is entitled “An act to provide for the transfer of all matters relating to the school funds, from the State bank and branches to the office of superintendent of education.”

By the first of these acts, the administration of free public schools thereby established was committed to a superintendent of education for the State. Three commissioners of the public schools in each county, and three trustees of free public schools in each township. By the second of said acts, the three commissioners for each county were superseded by a county superintendent of free public schools in each county. By this latter aGt, the respective powers and duties of these officers are prescribed. Among other duties, the superintendent of education was to have and exercise a general supervision over all the educational interests of the State, and to prepare and preserve, in well bound official books, complete and particular exhibits of the condition of the public school fund of each township in every county of the State, specifically discriminating as to the portion derived from its sixteenth section fund, and from other sources; and to see to the faithful disbursement and application of all moneys set apart and appropriated by said act to the use of free public schools; and the comptroller, by said act, was directed to transfer to him all books, documents, vouchers, bonds, notes, or other instruments appertaining to the school fund; and the interest upon all notes given for the purchase of sixteenth sections, except such as were deposited in the banks for collection, and the rents of such sixteenth sections as were leased, were to be paid to the county superintendent of the proper county, to be by him paid out according to the provisions of said act.

The several county superintendents were to have a general supervision of all free public schools in their several counties; to make a proper distribution among the trustees of free public schools in each township, in the manner by said act prescribed, of all funds that might be subject to their control for school purposes, and pay over the same promptly whenever called upon by said trustees to do so.

The said trustees in each township had, in like manner, the immediate supervision of the free public schools in their respective townships; the power to employ teachers; and they were required to faithfully disburse, in payment of teachers or for the legitimate purposes of said schools, all moneys which they might receive for such purposes.

By the act last above named, the act of the 6th of February, 1858, the commissioners and trustees of the State bank and branches were required to deliver to the superintendent of education all books, documents, notes, or other evidences of debt, relating to sixteenth section funds, that might be in possession of said bank or branches-; and it was made his duty to collect all debts due to said bank or branches payable for the purchase of school lands, and for that purpose, he was invested with all the powers in reference thereto which had belonged to said bank and branches; and to pay over the moneys received from the collection of said notes to the treasurer of the State; but it was provided in said act that it should not interfere with, or empower the said superintendent to collect any moneys loaned out by the trustees of any township in this State, as theretofore authorized by law.

Here, we see that the superintendent of education was invested with all the powers to collect these notes, relating to sixteenth section funds, that had been possessed by said bank and branches. Said bank and branches made said collections, when necessary, by suits in their own names, and by the powers here given the said superintendent might have collected them by suits in his own name, as superintendent, &c. Now, as by said act of the 14th of February, 1856, all notes for the sale of sixteenth sections, under the Oode of 1852, which were deposited with the comptroller, were, by said act, to be by said comptroller transferred to the superintendent of education, and he charged with the collection of the same, although said notes were made payable to the State of Alabama, for the use of the respective townships, we can see no good reason why they might not have been collected by suit in his name as superintendent. But as this question is not involved in this case, we decline to say any thing more definite about it, but leave it open for decision if it ever becomes necessary.

The note, the foundation of this action, is not a note given for the purchase-money on the sale of the sixteenth section of said township, but for money loaned by the trus^ tees of said township, which had been derived from the sale of said sixteenth section; a note not payable to the State bank or any one of its branches, nor to the State of Alabama, but to the trustees of said township, or their successors in office. Although I have been unable to find any express provision authorizing such loans, yet we think the proviso to said act of the 6th of February, 1856, to say the least of it, is a clear negative authority for such loans; and before the adoption of the present constitution, and the school system inaugurated under its provisions, the said note might have been collected by suit in the name of the.trustees of said township, or their successors in office. If the law permitted the loan to be made, but did not prescribe to whom the note should be payable, it was properly made payable to the trustees, or their successors in office, and they might have maintained an action upon it in their own name, as trustees, notwithstanding section 2523 of the Revised Oode. Although the inhabitants of the township had a substantial interest in the money, they had no such interest as would authorize a suit in their name under said section. The money could not, lawfully, be paid to, or be received by them, but should have been paid to said trustees, who were charged with the faithful disbursement of-it, in the payment of teachers or other legitimate school purposes.

Said trustees had not only the legal title to said note, but were, within the meaning of said section, the parties really interested. "What the words, “ the party really interested,” as used in said section, mean, I readily admit I do not very well understand; no rule, so far as I know, has been laid down by which their meaning, as applicable to particular cases, or to cases generally, can be certainly ascertained.

In ordinary cases, there is little difficulty. Where the dry, legal title is in one, and a clear, equitable title is in another, whether by transfer, delivery, or otherwise, to whom alone the money belongs, and who only is entitled to receive it, and authorized to discharge the debtor, — in such cases, there is no trouble; the action must be brought in the name of the equitable owner. He is, in the language of said section, the party really interested. But where the party having the legal title, is also the only party entitled to receive the money and discharge the debtor, although, When collected, he holds the money, not for his own use, but for the use of some other person or persons, and to whose use he is to apply it, or to whom he is bound to pay it, — in all such cases, the action must be in the name of the party having the legal title. Eor example, a person dies intestate; his creditors and his distributees are the persons really interested in his estate, but the legal title; especially as to the personalty, passes to, and vests in, his personal representatives, and they only at law can maintain an action to collect the debts due to the deceased; they only are entitled to receive the money, and they only can discharge the debtors. So, in the present case, before the adoption of the present constitution and inauguration of the present educational system, an action upon said note would, properly, have been in the name of the trustees of said toAvnship, or their successors in office, although the money, when collected, would not have been for their use, but for the use of schools in said township; in other words, the inhabitants of said township, to whom the sixteenth section thereof was originally granted for the use of schools, wouldx have been the parties really interested; and the present inhabitants are, now, the parties really interested in the money sought to be recovered by this action, but not in the sense in Avhich said words are employed in said section, and I think it very clear, no action can be maintained upon it in their name.

It is earnestly and ably argued by defendant’s counsel, that the complaint shows that said note was, and is, the property of a corporation known and described as “ Township 22 of Range 4, east,” created by the laws of Alabama, capable of suing and being sued in its corporate capacity. By section 502 of the Code of 1852, the inhabitants of each township in this State were incorporated, by the name of “ Township —in Range —,” according to its number by the surveys of the United States. By section 822 of said Oode, each township, in its corporate capacity, as created by said section 502, might hold real estate in their respective townships, not exceeding two acres, and personal property to the value of one thousand dollars. These corporations Avere created, manifestly, not to have the management of the sixteenth sections, or the control or disbursement of the funds to be derived from the leasing or sale of said sections, but for other purposes, to-wit: to hold the title to two acres of land, intended, no doubt, as a site for the school house of the township, and personal property, necessary and appurtenant thereto, not to exceed in value one thousand dollars. No action, therefore, could be prosecuted by said corporation for the recovery of said note, either as having the legal title, or as the party really interested. Said corporation had no authority to receive the money, or to discharge the debtors.

I have shown, as I think, that under the old school system, an action to enforce the payment of this note should have been in the name 'of the toAvnship trustees; but, as that system has passed away, and a new system has been inaugurated under the present constitution, and its management committed to the “board of education,” exercising full legislative powers in reference to the public educational institutions of the State, it is necessary to look to that system and the legislation under it, to see if any, and if any, what provisions have been made for the collection of this and other like notes. Here, we find that by an act of the board of education of the 5th of August, 1868, pro-' vision is made for the appointment of superintendents of education in each county in the State, under the new system ; and by an act of the 11th of August, of the same year, only six days afterwards, all offices of county superintendents, township trustees, and school commissioners, were thereby declared vacant. These were the offices under the old system. And also, by an act of the same date, it is provided that “ all moneys, records, books, or other property, now ” (then) “ in the hands of county superintendents, township trustees, or other school authorities, are ” (were) “to be turned over to the county superintendents, or their successors in office.”

The language here used is broad enough to embrace, and does embrace, notes then in the hands of township trustees for moneys loaned by them, and, by a fair and reasonable interpretation, it operated as a legislative transfer of the note, the foundation of this action, to the plaintiff As county superintendent of education of said county; and when actually turned over to him by the trustees, he became the legal holder of the same, for the use of schools in said township, and might sue on and collect said note in his own name as county superintendent of education, in like manner as the. township trustees, to whom it was made payable, might have done under the law as it existed before the adoption of the present constitution, and the inauguration of the new educational system under its provisions.

Eor these reasons we hold, that the court below erred in sustaining the demurrer to the plaintiff’s complaint.

Let the judgment be reversed, and the cause be remanded for further proceedings, at the appellee’s costs.