Case Name: First National Bank of Northumberland versus Rush School District
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1876-02-07
Citations: 81 1/2 Pa. 307
Docket Number: 
Parties: First National Bank of Northumberland versus Rush School District.
Judges: Before Agnew, C. J., Sharswood, Mercur, Gordon, Paxson, and Woodward, JJ.
Reporter: Pennsylvania State Reports
Volume: 81 1/2
Pages: 307–310

Head Matter:
First National Bank of Northumberland versus Rush School District.
1. Orders drawn by the president of school directors on the treasurer of the district under the school law are not negotiable.
2. Such orders are merely warrants for the payment of money to those to whom they are issued, to be disbursed by the treasurer under authority of law.
3. Such orders do not authorize a subsequent holder to sue in his own name as upon a promissory note or bill.
4. Such orders have not the ordinary properties of a contract; they are but a statutory means of drawing public money from the legal custodian of the funds of the district.
January 27th, 1876.
Before Agnew, C. J., Sharswood, Mercur, Gordon, Paxson, and Woodward, JJ.
Error to the Court of Common Pleas of Northumberland, County, of September Term,. 1875, No. 7.
This was an action of assumpsit brought February 21st, 1871, by the First National Bank of Northumberland against Rush School District.
The cause of action was the following instrument of writing:
“ §105. July 27th, A.D. 1870.
" To the Treasurer oe Rush School District.
“ Sir : You will, on or before the first day of January, A.D. 1871, pay to the order of Abel .Marcy the sum of one hundred and five dollars, it being the amount due for school apparatus furnished to Rush School District, for which this will be sufficient voucher on settlement of your accounts. Payable at the First National Bank of Danville, Pá.
“ By orde'r of the Board of Directors,
(Signed) W. R. Sober,
“ President.
(Countersigned) Edward Grady,
“ Secretary.”
(Indorsed) Abel Marcy, pay B. K. Gearhart, Cashier. J. II. Jenkins, Cashier. Protested.”
The affidavit of defence was:
“.....Abel Marcy called upon the officers of Rush School District and represented himself as an agent for the sale of school globes, and persisted in their making a purchase of the same, and was to have the said globes delivered in a few days afterwards, for which they have a history to that effect; that said globes never were delivered by the said Marcy, or any person for him, and that they verily believe that the said Marcy has practiced a fraud upon the school district.”
The plaintiff’s original declaration averred the making of “ an order in writing,” to wit, the instrument above stated, that the same was delivered to the plaintiff, and the defendant thei’eby promised to pay the plaintiff, or order, $105, on etc., “ which period has now elapsed,” and the defendant, in consideration of the premises, promised to pay the amount of the order to the plaintiff according to the tenor and effect thereof, etc.
The plaintiff afterwards filed an amended declaration, averring in the first count, the making an order in writing by the defendant, “ payable to the order of Abel Marcy, who indorsed and delivered the sai'd order to the plaintiff',-” setting out the order; that it was presented for payment when due, and protestedj etc. In the second count, that the defendant, on July 27th, 1870, “made a certain bill, order, or note in writing, called a promissory note, and thereby promised to pay Abel Marcy or order” $105, on or before January 1st, 1871, which period had elapsed, and no part of the money had been paid ; that Marcy, before it was due, indorsed the said bill, etc., and thereby “ordered the said sum of money, ... in the said bill, etc., specified, to be paid to the plaintiff. By means whereof, and by force of the statute, etc., the defendant became liable to pay the plaintiff the sum of money in the said bill, etc., specified” according to the tenor and effect of the bill and the indorsement, and being so liable, the defendant, in consideration thereof, promised the plaintiff to pay the money, etc. The defendant pleaded nonassumpsit and payment with leave, etc.
The case was tried February 22d, 1875, before Rockefeller, P. J.
The plaintiff proved the making of the paper, its signature by the president and secretary of the board of school directors when there was no meeting of the board, and offered to read the paper. The defendant objected to its admission :
1. Because the certificate or order offered is payable out of a particular school fund, to wit, the school fund of Rush township, which destroys its negotiability.
2. Not being a bill of exchange or negotiable paper, suit cannot be maintained on it in the name of the First National Bank of Northumberland, on the blank indorsement of the payee.
8. If suit could be maintained on it, it must be in the name of the payee, for the use of the First National Bank of Northumberland.
4. That this suit cannot be maintained on this instrument of writing at all, it being in the character of a county order or warrant. It is neither a' note, bill of exchange, or contract, and suit would have to be brought on the original contract.
5. The school directors of Rush township, by their president and secretary, have no power or authority to give a writing purporting to be a bill of exchange ; they, being the creatures of the statute, cannot go beyond their power delegated to them by the statute.
• 6. If they have the power, it can only be done by a vote of the school board in a meeting had for that purpose, and so entered upon the minutes, and it is obligatory on the plaintiff to show that all this has been done, before they can give the paper in evidence.
The Court overruled the objections, admitted the evidence, and sealed a bill of exceptions for defendant.
The plaintiff then proved the indorsement of Marcy, and read the order in evidence and closed.
Defendant moved for a nonsuit, which was ordered, and the Court afterwards refused to take it off.
The plaintiff removed the record to the Supreme Court by writ of error, and assigned the entering of the nonsuit for error.
J. A. Cake, for plaintiff in error.
By the a'ct of May 8th, 1854 (Pamph. L., 621), 1 Br. Purd., 214, pi. 51, school directors shall pay all necessary expenses of the schools by drafts on the district treasurer, signed by the president and attested by the secretary. A bill payable to the order of the payee, or to the bearer, is negotiable: 1 Bouvier’s Law Dict., 202, 2 Id., 212. A bill payable to one or his order is assignable by indorsement: Gerard v. La Coste, 1 Dallas, 196 ; Byles on Bills, 132. Corporations may draw bills when these are the usual or proper means to accomplish the purposes of their organization: Byles on Bills, 113; Clark v. School District, 3 Rhode Island, 199.
G. W. Ziegler, for defendant in error as to the negotiability of the instrument,
cited Reeside v. Knox, 2 Wharton, 233; Warner v. Commonwealth, 1 Barr, 154; Allison v. Juniata Co., 14 Wright, 351; Dyer v. Covington Township, 7 Harris, 200.

Opinion:
Judgment was entered in the Supreme Court, February 7th, 1876.
Per Curiam:
Orders drawn by a president of a board of school directors on the treasurer of a school district, under the school law, are not negotiable bills or orders, but mere warrants for the payment of money to the persons to whom they are issued, to be disbursed by the treasurer under authority of law. They therefore do not authorize a subsequent holder to maintain suit in his own name, as upon a promissory note, bill, or order. They do not possess the ordinary properties of a mere contract, but are a statutory means of drawing the public money out of the hands of the legal custodian of the funds of the district.
Judgment affirmed.