Opinion
No. 30196.
November 14, 1932. Suggestion of Error Overruled January 23, 1933.
1. TAXATION.
Declaration alleging taxpayer gave tax collector check on bank in collector's town December 12, but that collector did not present check before bank failed December 16, held good against demurrer (Code 1930, section 2842).
2. BILLS AND NOTES.
Generally, reasonable time for presenting check on bank in same business community as recipient is next business day after receipt (Code 1930, section 2842).
3. PRINCIPAL AND AGENT.
Gratuitous agent, negligently and heedlessly exposing principal to loss, is liable.
4. TAXATION.
Where tax collector failed to present check before bank failed, taxpayer had no cause of action against collector on ground he failed to deposit check in depository immediately in accordance with duty.
5. PLEADING.
Where demurrer was to whole declaration and one count was good, demurrer should have been overruled.
ON SUGGESTION OF ERROR. (Division A. Jan. 23, 1933.) [145 So. 617. No. 30196.]1. TAXATION.
Any damages recoverable by taxpayer for tax collector's failure to present check before failure of bank were such only as were allowed at common law, not under statute requiring presentment within reasonable time (Code 1930, section 2842).
2. TAXATION.
Tax collector in taking taxpayer's check was not mere gratuious agent for taxpayer, since collector had interest in purpose to be accomplished.
3. TAXATION.
Even if tax collector were mere gratuitous agent of taxpayer from whom he accepted check, collector would nevertheless be liable to taxpayer if taxpayer lost money because of collector's failure to exercise diligence to collect check.
4. NEGLIGENCE.
Negligence is inference to be drawn from facts in case.
5. NEGLIGENCE.
Where only one reasonable inference can be drawn from facts, question of negligence is for trial judge.
6. NEGLIGENCE.
If more than one reasonable inference can be drawn from facts, question of negligence is for jury.
7. PLEADING.
Where declaration was good as to one of demurring defendants, demurrer was properly overruled as to both demurring defendants.
APPEAL from circuit court of Sunflower county. HON. S.F. DAVIS, J.
F.E. Everett and O.B. Townsend, both of Indianola, for appellant.
It is a principle of law too well settled to admit of argument or require the citation of authorities that a demurrer to the declaration admits of all of the facts which are properly pleaded as being the facts in that case but simply says that they do not constitute a cause of action against the defendant.
A check must be presented for payment within a reasonable time after its issue or the drawer will be discharged from liability thereon to the extent of the loss caused by the delay.
Section 2842, Mississippi Code 1930.
Undoubtedly, it is the law that generally, in the absence of special circumstances excusing delay (and there is no pretense of any excuse here), the reasonable time for presentment of a check on a bank where the person receiving the same and the bank on which it is drawn are in the same business community is not later than the next business day after it is received.
Moritz v. Nicholson, 106 So. 762-763; 5 R.C.L. 509; Colwell v. Colwell, 4 A.L.R. 876; Empire-Arizona Copper Co. v. Shaw, 4 A.L.R. 1229; 8 C.J. 540; Colwell v. Colwell, 92 Or. 103, 4 A.L.R. 876, 179 P. 916; 5 R.C.L. 509; Cyc. 977; Fortner v. Parham, 2 Smedes and Marshall, 151; Moritz v. Nicholson, 106 So. 762.
A check is a bill of exchange payable on demand and is a negotiable instrument.
Section 2841, Code of Mississippi 1930; Bank v. Smith, 95 So. 785; Anderson v. Bank, 100 So. 179; Baskerville v. Harris, 41 Miss. 535.
No delay in making presentment of paper payable on demand, can be termed reasonable, if it is more than is fairly required, in the ordinary course of business, without special inconvenience to the holder, or by the special circumstances of the case.
Phoenix Ins. Co. v. Gray, 13 Mich. 191; Parker et al., v. Reddick, 65 Miss. 245; 8 C.J. 540.
We contend that the sheriff was negligent when he accepted the check or any other form of payment which is not provided for by statute. There was negligence on the part of the tax collector to fail to object to payment of taxes in any species except that provided by statute, and when he failed to make such objection, but accepted such other payment and caused a loss to the plaintiff by not presenting the check within a reasonable time he is estopped from denying liability.
Gaunt v. Alabama Oil Gas Co., 23 A.L.R. 1282.
A tax collector or other official must at least act in good faith with the public.
22 R.C.L. 461; Feshen v. King County, 27 A.L.R. 1208.
While the exact question presented in this count of the declaration to-wit; the liability of the officer to the injured party for his failure to present a check given for taxes within a reasonable time, has not been decided in Mississippi that we have been able to find, yet it has been decided elsewhere and we feel that this court will gladly look to other authorities on the same question.
Chouteau v. Rowse, 56 Mo. 65; 4 Kent's Co. 549; Morrison v. McCartney, 30 Mo. 183; State ex rel. Clark v. Gates, 67 Mo. 139.
If after thus receiving this check in payment of the taxes, the defendant returned the taxes delinquent and the plaintiffs were compelled to pay them again, that rendered him liable to them for the amount of the check, as so much money paid to him to pay their taxes and converted by him to his own use.
Chateau v. Rowse, 56 Mo. 65.
Public officers are insurers of the safety of public money coming into their hands by virtue of their office, and are liable in all cases for its loss, unless caused by the Act of God or the public enemy.
State v. Lee, 72 Miss. 281, 16 So. 243; Griffin v. Board of Levee Commissioners, 71 Miss. 767; 15 So. 107.
If a sheriff collects money, and of his own accord deposits the money in a bank which fails, he is liable to respond to the plaintiff.
Phillips v. Lamar, 27 Ga. 228.
If a sheriff collects money on execution and puts it in a trunk under his bed, and it is stolen while he is asleep, he is liable to account to the plaintiff for the loss.
Gilmore v. Moore, 30 Ga. 628.
Frank E. Everett, of Indianola, for appellant.
We do not claim that the taxes were paid but we allege that we were damaged by the failure of the tax collector to present the check, it therefore being necessary for the appellant to pay the taxes, and by reason of that negligence the appellant lost in the failure of the bank the amount of the check first given to the tax collector. There is no similarity between the case at bar and the case of Moritz v. Nickleson.
This court is not only warranted in following the decisions of other courts in holding the tax collector liable for his negligence in the failure to present a check for payment within a reasonable time as fixed by law but decisions of other courts should be persuasive in the decision of this question.
Neill Clark, of Indianola, for appellee.
Undoubtedly it is the law that generally, in the absence of special circumstances excusing delay (and there is no pretense of any excuse here), the reasonable time for presentment of a check on a bank where the person receiving the same and the bank on which it is drawn are in the same business community, is not later than the next business day after it is received. But that principle has no application to the facts of this case, because the check here was for the payment of state and county taxes. Section 4319, Code of 1930 (Hemingway's Code, Section 6953), makes provision for what shall constitute a valid payment of such taxes; In substance, it provides that all legal tender money issued under the authority of the Federal Government shall be received in payment of taxes due the state, and such legal tender money and warrants drawn on the county treasury shall be received for county taxes.
Moritz v. Nicholson, 106 So. 762.
The failure of the tax collector to present a check given him in payment of taxes, resulting in its non-payment because of the failure of the bank on which it is drawn, does not have the effect to relieve the taxpayer.
Moritz v. Nicholson, 106 So. 762.
We can see no difference in the position of the sheriff and tax collector in the instant case, and the position of the sheriff and tax collector in the case cited above. This case, as has been held by our court, is not one of commercial paper, and the rules governing commercial paper have absolutely no application to the official acts of a public officer, as here complained of, for the reason that the law says what the collector shall collect in taxes, and the giving of a check to a tax collector is merely a conditional payment of taxes, and can be ripened into payment only when the check is presented and honored by the bank.
The appellant in this case knew what constituted a payment of his taxes under the law (or is presumed to have known what the statute provides) and if he had used such medium in the payment of his taxes, as is provided by the statute, then his taxes would have been paid, and the tax collector would have been liable should the money or medium of payment have been lost for any cause.
The check having been accepted by the tax collector as an accommodation only to appellant, and as a conditional payment only, of appellant's taxes, there was no duty owing by the tax collector to the appellant in the future handling of the check.
We respectfully suggest that the apparent construction placed by the court on this Section of the Negotiable Instruments Law, Sec. 2842, Code of 1930, is a distinct departure from the wording of the statute, and a distinct departure from the general construction heretofore placed thereon by the courts.
Presentment and demand are likewise necessary, in case of a check, in order to hold the drawer; but want of presentment does not discharge the drawer of a check on a bank, unless he is damaged thereby.
8 C.J., section 745, page 532.
The construction is, that where presentment is unreasonably delayed, the holder of the check is denied a right of action as against the drawer on the check, and is denied further a right of action on the debt in respect to which the check is given, as against the drawer; and not construed to mean generally that the drawee of a check is automatically charged with liability on the check by negligent failure to present within a reasonable time and loss occurs.
The Sunflower Compress Company, does not claim to have been discharged from the payment of the taxes for which the check was given, but has recognized the continuance of the debt, and has paid the taxes. The provision of the statute and underlying principles therefore could not apply to this case.
Failure on the part of a tax collector to present a check accepted by him in payment of taxes, however negligent, could not discharge the debt, nor would drawer of the check be discharged, and for stronger reasoning in such cases, the drawee would not automatically be charged with the loss. Appellant's cause of action in this case, if any, must necessarily be grounded in tort for the wrongful handling of the check, and not on the principle of liability as an agent for failure to present within a reasonable time, as provided by the Negotiable Instruments Act.
This court erred in holding that the declaration states a cause of action as against the sheriff and tax collector and the surety on his official bond under the principles of agency.
This court has held in numerous cases that a tax collector is within his right in refusing to accept anything in payment of taxes, except such as is set out in the section quoted.
Fortner v. Parham, 2 Smedes Marshall, 151; Cox v. Lincoln County, 2 Miss. Dec. 28; Foote v. Brown, 60 Miss. 155; Jones v. Melchoir, 71 Miss. 115, 13 So. 857; Moritz v. Nicholson, 141 Miss. 531, 106 So. 762.
No duty therefore rested on the tax collector to accept the check sued on, and the result must necessarily follow that when the tax collector accepted the check, outside of any duty so to do, a gratuitous agency was created, as between the drawer of the check and Arthur B. Clark, personally, and his act in so doing was personal and not official. There can be no gratuitous agency created as between an official and the surety on his bond and a person with whom the official deals, for the reason that said official and the surety on his bond are answerable only when acting within the actual or legally contemplated duties of the office, as prescribed by law.
Koonse v. District of Columbia, 54 Am. Rep. 279.
The declaration in this case states no cause of action as against a gratuitous agent, because the declaration asserts that there was no duty resting on the tax collector to accept the check sued on and fails to charge gross negligence in its handling, and fails to charge such facts as could be construed to be gross negligence in the handling of the check, and such statement of gross negligence must be alleged to constitute a statement of a cause of action as against a gratuitous agent.
Richardson v. Futrell, 42 Miss. 543; 6 C.J. 1125; Lampley v. Scott, 24 Miss. 528; Railroad Company v. Tonstime Co., 64 Miss. 834; Eddy v. Livingston, 35 Mo. 487; 88 Am. Dec. 122.
Argued orally by F.E. Everett, for the appellant, and A.B. Clark, for appellee.
This is an appeal from a judgment sustaining a demurrer to a declaration and dismissing the plaintiff's suit.
The declaration is in two counts. The first count alleges, in substance, that the appellee Clark, at the time the matters here complained of occurred, was the sheriff and tax collector of Sunflower county, and that the appellee, the United States Fidelity Guaranty Company, was the surety on his official bond; that the appellant owned property, situated in Sunflower county, on which taxes to the amount of nine hundred fifty dollars were due; that on the 12th day of December, 1931, the appellee had on deposit with the Bank of Indianola, located in the city of Indianola and within one business block of the appellee's (Clark's) office, a sum of money exceeding nine hundred fifty dollars, and continued to so have until the bank failed and went into liquidation on December 16th thereafter; that, pursuant to "the custom and usual way of paying taxes," the appellant delivered to the appellee Clark on the 12th day of December, 1931, its check for the amount of taxes due on its property, and received from him a tax receipt therefor, but that Clark failed to present the check for payment until after the bank had failed, resulting in the appellant having to again pay the taxes due on this property, because of which the appellant was damaged in the sum of nine hundred fifty dollars, for which it prayed for a judgment.
The second count alleges, in addition to the matters set forth in the first count, in substance, that the bank of Indianola was a legally designated and qualified depository for county funds; that it was Clark's duty to immediately deposit the check given to him by the appellant for the amount of its taxes in this county depository; and that, if he had so deposited it, the check would have been paid; but that he negligently failed to do so, resulting in the loss to the appellant of the amount of the check for which it prayed for a judgment.
Clark and the surety company joined in a single demurrer to the declaration. This demurrer was sustained, and, on the appellant's declining to amend its declaration, a final judgment was rendered denying it a recovery.
Under section 2842, Code 1930, a check must be presented for payment within a reasonable time after its issuance, in default of which the drawee must bear the loss occasioned thereby. "In the absence of special circumstances excusing delay (and there is no pretense of any excuse here), the reasonable time for presentment of a check on a bank where the person receiving the same and the bank on which it is drawn are in the same business community is not later than the next business day after it is received." Moritz v. Nicholson, 141 Miss. 531, 106 So. 762, 763.
The appellee admits that such is the general rule, but asserts that it has no application here, for the reason that taxes can be paid only in money, and therefore he was under no obligation to receive, or, after receiving it, to collect, the check, in support of which he relies on Moritz v. Nicholson, supra. That case did not and could not have so held; there being no such question there presented for decision. In that case the plaintiff had given the tax collector a check on a bank for the amount of his taxes, which check the tax collector negligently failed to present for payment before the bank on which it was drawn failed; and, the taxes which the plaintiff attempted to pay by means of this check not being thereafter paid, the tax collector sold the property for nonpayment of taxes. The plaintiff then sued the tax collector for the statutory penalty for selling property for taxes on which the taxes had been paid. The court held that this penalty could not be recovered, for the reason that the acceptance of the check by the tax collector was not a payment of the taxes, and therefore it became the duty of the tax collector to sell the land therefor. The liability vel non of the tax collector for the actual damages sustained by the drawer of the check, because of the delay in presenting it for payment, was not involved.
The appellee further asserts that the check was accepted by him as an accommodation to the appellant, and we will assume, but merely for the purpose of the argument, that the declaration so disclosed, and therefore he was merely a gratuitous agent in the matter, nevertheless the same result must follow. Such an agent is not held to the same degree of care and diligence that an agent for hire is, but he is liable to his principal if he negligently and needlessly exposes his principal to loss. 2 C.J. 722; Moore v. Gholson, 34 Miss. 372; Lampley v. Scott, 24 Miss. 528. The declaration presents a prima-facie case of liability which the appellee must meet, if at all, by disclosing facts that relieve him of the charge of negligence.
The second count of the declaration presents no cause of action. Had the appellant's taxes been paid in money, or had the check given the appellee therefor been collected by him, his failure to deposit the money or the check in the county depository, if such was his duty, as to which we express no opinion, was no concern of the appellant, that being a question between the appellee and the county or other public body to whom he owed the duty of depositing public money in the county depository.
The demurrer, being to the whole declaration, and not to its separate counts, should have been overruled.
Reversed and remanded.
ON SUGGESTION OF ERROR.
On suggestion of error. Suggestion of error overruled. For former opinion, see 114 So. 477.
The judgment of the court below herein was reversed on a former day of the present term, and a full statement of the case will be found in the opinion then rendered. 114 So. 477, 478.
The appellee now suggests that we erred in holding that the first count of the declaration stated a prima facie case of negligence on his part in failing to collect the check that was given him by the appellant. The suggestion of error proceeds on the theory that we based the appellee's liability on section 2842, Code of 1930, and the opinion is susceptible of that interpretation. The damages for which the appellee is here liable, if any, are not such as that statute imposes, but are such only as are allowed at common law. This appears in the opinion in connection with the citation therein of 2 C.J. 722, and Moore v. Gholson, 34 Miss. 372.
When the appellee received the check he thereby assumed an obligation to collect it and apply the proceeds to the payment of the taxes due by the appellant, becoming thereby the appellant's agent for that purpose. This agency was something more than a mere gratuitous one, for the appellee himself had an interest in the purpose to be thereby accomplished. Moreover the appellant, after delivering the check to the appellee, became thereby obligated morally, if not legally, as to which we express no opinion, not to withdraw the money from the bank but to leave it there subject to the check. Had the appellee declined to accept the check, all the appellant would have had to do would have been to itself withdraw the money from the bank and apply it to the payment of its taxes. But even should we hold that the appellee was a mere gratuitous agent, nevertheless he will be liable to the appellant if it lost its money because of a failure by the appellee to exercise that degree of care and diligence to collect the check that he should have exercised. This is in accord with practically all of the authorities which hold, in effect, as set forth in section 599, A.L.I. Rest. Agency, Tentative Draft No. 7, that: "One who by a gratuitous promise or other conduct which he should realize will cause another reasonably to rely upon the performance of definite acts of service by him as the other's agent, causes the other to refrain from having such acts done by other available means, is subject to a duty to use care to perform such service or, while other means are available, to give notice that he will not perform." 2 C.J. 722, section 384; Lampley v. Scott, 24 Miss. 528; Moore v. Gholson, 34 Miss. 372; Richardson v. Futrell, 42 Miss. 525.
The only difference between the liability of a gratuitous agent and one for hire is, as set forth in our former opinion, that a gratuitous agent is not held to the same degree of care and diligence that an agent for hire is. Authorities, supra. Moore v. Gholson is controlling here, for the agency there, as here, was for the collection of a debt due the principal. This conclusion is in accord with that reached by the Missouri court in Chouteau v. Rowse, 56 Mo. 65, and State ex rel. Clark v. Gates, 67 Mo. 139. But the question is so elementary that the citation of authority is unnecessary therefor.
The fact that we are deciding this case on the sufficiency of the facts alleged in the declaration to constitute negligence, and not on a request for a directed verdict either way on evidence disclosing such facts only as the declaration alleges, must not be overlooked. Negligence is an inference to be drawn from the facts in each case. If the facts are such that only one reasonable inference can be drawn therefrom, the question is for the decision of the judge; but if more than one reasonable inference can be drawn therefrom, it is for the decision of the jury under proper instructions. All we here decide is that, on the facts alleged in the declaration, it cannot be said as matter of law that no reasonable inference can be drawn therefrom other than that the appellee was not guilty of such negligence as rendered him liable to the appellant for the damages flowing to it therefrom. Whether the contrary inference, that is, that the appellee was guilty of such negligence, appears so clearly from the facts alleged as not to require its submission to the jury is not necessarily before us, and we express no opinion thereon.
The expression in our former opinion, that "in default of which [presentment of the check for payment within a reasonable time the drawee must bear the loss occasioned thereby," may not be a correct interpretation of section 2842, Code of 1930, and should not have been used, for, as hereinbefore stated, the appellee's liability is that which the common law imposes.
The suggestion of error presents and argues a question not referred to, or in any way raised, on the former hearing, and that is that, conceding the personal liability of the appellee, Clark, his conduct was not such as renders his official bond liable therefor, and consequently the court below was correct in sustaining the demurrer as to his bondsman. As pointed out in the original opinion, only one demurrer was filed; both of the defendants joining therein. This demurrer contains no language submitting to the court the separate liability of the appellee and of his bondsman, and the rule in such cases is, that if the pleading demurred to is good as to one of the demurrants, the demurrer should be overruled as to both. Wherry v. Latimer, 103 Miss. 524, 60 So. 563, 642; 49 C.J. 433. We, of course, express no opinion on the separate liability of the appellee's bondsman.
Suggestion of error overruled.