Shakespear v. Smith

California Supreme Court Dec 29, 1888 No. No. 11541Published

Before: Searls

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Holding. An order issued by a school district board of trustees is void when it is approved by a board member who holds a personal financial interest in the claim. Such an order is not a negotiable instrument and remains subject to all original defenses in the hands of subsequent holders.

Issues

Whether an order approved by a school trustee who is personally interested in the claim is void for lack of a competent majority.
Whether an order issued by school trustees is a negotiable instrument that protects an innocent holder from defenses affecting its validity.
Whether the superintendent of schools and the bank holding the order are properly joined as defendants in an action to declare the order void.

Disposition. reversed and remanded

Quotations verified verbatim against the opinion

“The order in question was drawn by the concurrence of two only of the trustees, one of whom was interested in it, and being incompetent to act, it was void for want of the sanction of a competent majority of the board.”

“The order in question is not a negotiable instrument in the broad sense that an innocent holder for a valuable consideration is protected.”

“If illegal when issued, they are illegal for all time.”

Synopsis

Appeal from a judgment of the Superior Court of Napa County.

The facts are stated in the opinion of the court.

Searls, C. J. This is an action by plaintiff as a taxpayer and resident of St. Helena school district No. 10, county of Napa, on his own behalf, and in behalf of all other tax-payers of said school district, for the surrender and cancellation, and to declare null and void, a certain order of W. A. C. Smith and 0. N. Hale, two of the trustees of said school district, on the county superintendent of schools, in favor of George B. Kennedy or order, which said order, with the assignments and indorsements thereon, is in the words and figures following:—

[639]“order upon the county superintendent oe public

SCHOOLS.

“No. 294. St. Helena, January 8, 1886.

“ The county superintendent of public schools of Napa County will draw a requisition on the county auditor against the special tax school fund for $930.93 in favor of George B. Kennedy or order, on account of a contract for repairing school-house in full during the present school year in St. Helena school district.

“ W. A. C. Smith,

“C. N. Hale,

“School Trustees of St. Helena District.

“Indorsed: Pay to W. A. C. Smith or order.

“ Geo. B. Kennedy.

“ Pay Bank of Napa or order, for collection.

“Account of W. A. 0. Smith.” "

The complaint shows that plaintiff and defendants W. A. C. Smith and 0. N. Hale were trustees of the school district mentioned, and as such they, or a majority of them, contracted with the defendant George B. Kennedy to repair the school-house of their district, in consideration of which they agreed to pay $892.51 on or before September 10, 1885, or in lieu thereof to give an order to the school superintendent for a like amount; that at the instance of the trustees, Kennedy performed certain extra labor upon the school-house which, added to the contract price, aggregated $930.93, as specified in the foregoing order.

Upon the allowance of the order, plaintiff voted against, and defendants Smith and Hale for, such allowance.

Shakespear v. Smith

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Synopsis

SCHOOLS.

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