Malone v. State ex rel. Gallion

234 So. 2d 32, 285 Ala. 493, 1970 Ala. LEXIS 1060
CourtSupreme Court of Alabama
DecidedApril 2, 1970
Docket3 Div. 275
StatusPublished
Cited by8 cases

This text of 234 So. 2d 32 (Malone v. State ex rel. Gallion) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Malone v. State ex rel. Gallion, 234 So. 2d 32, 285 Ala. 493, 1970 Ala. LEXIS 1060 (Ala. 1970).

Opinion

MERRILL, Justice.

This is an appeal from a decree and .'judgment in favor of the State of Alabama in an equity suit which sought to recover for five quarterly payments alleged to have been due from appellant Malone pursuant to an alleged contract between appellant and the State Board of Education of Alabama, and sought to recover the penalty on appellant Malone’s surety boncl from the appellant Auto-Owners Insurance Company of Lansing, Michigan.

Under the terms of a contract dated January 1, 1956, between the State Board of Education (hereinafter referred to as the Board) and Malone, the Board appointed Malone to maintain a textbook depository. Malone was to retain 20% of the retail price of all textbooks sold by him as full compensation for his services. He agreed to pay over to the Board an amount equal to 5% (later changed to 3%) of the aggregate retail purchase price 'of all textbooks sold by him. He further agreed to pay the Board 5% (later changed to 3%) of the price of all books purchased by the State at wholesale price for free distribution. Malone also agreed that the books purchased by counties and cities for free distribution would be sold at the retail price, less 10%, and that he would pay the Board 5% (later changed to 3%) of the proceeds of these sales. ' Local retail dealers, who sold books to parents ancl students, were to receive a commission of not less than 8% for their services.

The retail price of the books was set by the Board at 20% above the price which was paid to the publisher by Malone. Under the contract, the Board paid the publishers’ cost of the free textbooks furnished by the State to Malone, and Malone paid the publishers for the free and non-free books, but he paid the 3% of the established price to the Board on all books as the appointed “State Textbook Depository with the right and privilege of handling, selling and distributing all State adopted textbooks for the public schools of the State of Alabama.” The Board had this authority under a 1945 Act listed as Tit. 52, § 433(9) of the 1958 Recompilation.

[496]*496Malone paid the Board in quarterly payments. Through the years the Board had held, but not cashed, the checks until several were received, and then those which had accumulated were cashed and used to help pay the publishers for the free textbooks for which the Board was responsible.

This practice of holding the checks was explained by the then State Superintendent ’of Education, Dr. A. R. Meadows, who testified that the Attorney General had ruled that any moneys left in the Textbook Fund on September 30th of each year would revert to the Educational Trust Fund and have to be appropriated by the legislature. At one time, $50,000.00 did revert and was not spent for textbooks. Therefore, since the money was from the sale of textbooks, the checks were not cashed until it was time to pay the publishers for the textbooks furnished free by the State. This practice began in 1955 and was followed every year while Malone handled the textbook depository.

In 1963, Malone became aware that efforts were being made to cancel his contract, and he later received notice that his contract was cancelled. At that time, five of his checks totaling $114,089.06 were held by the Board. He stopped payment on the checks and they were not honored when presented. This suit was filed in equity to collect this amount, plus interest, in June, 1964.

Following considerable pleading, in which appellant Malone sought affirmative relief by set-off and recoupment, the cause was heard, testimony taken and the trial court found for the appellee and against appellants on all pleas and defenses and rendered judgment for the total amount of the checks, plus interest, and against the surety in the amount of its $50,000.00 bond.

The parties agree in brief that there is no material conflict in the evidence. The points raised by appellants, are strictly ones of law.

Appellants’ assignment of error 10 and other related assignments raise the point that the demurrer to the bill as a whole, as last amended, should have been sustained because the action, in equity, was improper.

This action was brought under Tit. 7, §§ 74 and 75, Code 1940, which provide:

“§ 74. Suits for money wrongfully used. — In the event any public officer or any agent of the state, or any depositary or custodian of the public funds or moneys, has wrongfully used such funds or moneys, suits for the recovery thereof may be instituted at law or in equity, before any court having jurisdiction of the subject-matter; and it shall not be ground of objection to such suit that either, or any, or all of the parties defendant do not reside within the county, or within the district in which such suit is instituted.”
“§ 75. Suit in equity. — Such suit may be instituted in a court of equity without the statement or assignment of any special cause for equitable interference; and such officer or agent, such depositary or custodian, and the sureties on his official bond, or any one or more of them, may be joined as parties defendant ; and any person who has wrongfully received such moneys or funds from such officer, agent, depositary, or custodian, may also be joined as a party defendant. No objections to such suit because of multifariousness must be entertained; nor shall the state be put to an election between the prosecution of such suit, and any suit at law instituted for the same purpose, or for the recovery of the same claim or demand.”

Appellants contend that this action was improperly brought under Tit. 7, §§ 74 and 75, in that it is not brought for the recovery of public funds or moneys and that Malone is not a “public officer or any agent of the state, or any depositary or custodian of the public funds or moneys.”

[497]*497First, we consider the question whether the $114,089.06 comes within the definition of “public funds or moneys.” In the context used in the statute, it obviously means “belonging to the State.” There is no question but the money was due the State under the contract, that Malone had conceded that it was due and wrote the checks, and that had the checks been cashed promptly, the money represented by them would have been • in the possession of the State. It is plain that this was money belonging to the State and the amount was contested neither by Malone nor the Board. We hold that it was “public funds or moneys.”

Next, we agree that Malone was not a public officer. But we are convinced that he was an agent of the State by virtue of the contract, and a depositary or a custodian of public funds or moneys. Malone was performing functions of a public nature which, under the statute, could have been performed by the Board or by “individuals, corporations, and county and city boards of education” with which the Board was given “full power and authority to contract with.” Tit. 52, § 433(9), supra. And the first sentence of § 433(9) reads: “It shall be the duty of the state board of education to provide for the distribution of textbooks in the State of Alabama by such method and in such manner as said board deems to the best interest of the patrons of the public schools.”

There can be no question but that Malone was acting as an agent and a custodian of public funds or moneys under his contract with the Board, and the Board was empowered under the statute to enter into such a contract.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Schultz v. SOUTHEAST SUPPLY HEADER, LLC
661 F. Supp. 2d 1260 (S.D. Alabama, 2009)
S.F. v. State ex rel. T.M.
695 So. 2d 1186 (Court of Civil Appeals of Alabama, 1996)
Home Indemnity Co. v. Ball-Co Contractors, Inc.
645 F. Supp. 25 (S.D. Alabama, 1986)
Sterling Oil of Oklahoma, Inc. v. Pack
287 So. 2d 847 (Supreme Court of Alabama, 1973)
State ex rel. Gallion v. Emmet
234 So. 2d 47 (Supreme Court of Alabama, 1970)

Cite This Page — Counsel Stack

Bluebook (online)
234 So. 2d 32, 285 Ala. 493, 1970 Ala. LEXIS 1060, Counsel Stack Legal Research, https://law.counselstack.com/opinion/malone-v-state-ex-rel-gallion-ala-1970.