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BOARD OF TRUSTEES OF STATE INSTITUTIONS OF HIGHER LEARNING v. CHARLES P. JOHNSON

MAY 13, 1987

BOARD OF TRUSTEES OF STATE INSTITUTIONS OF HIGHER LEARNING
v.
CHARLES P. JOHNSON



BEFORE HAWKINS, P.J., PRATHER AND GRIFFIN, JJ.

GRIFFIN, JUSTICE, FOR THE COURT:

This case, involving Mississippi's medical education loan program, comes to the Court from the Circuit Court of Marion County, which granted the loan's recipient, Dr. Charles P. Johnson, summary judgment. We reverse.

On July 29, 1975, the Board of Trustees of State Institutions of Higher Learning entered into a contract with Johnson, agreeing to lend him $24,000 for expenses, while a student at the Kansas City College of Osteopathic Medicine. The contract required Johnson to practice for five years in a community of 7,500 population, since changed to 10,000 population, or less. It also provided that Johnson was to repay the loan at six percent interest, and upon breach of its terms, to pay an additional $5,000" per year for each year remaining to be served "for liquidated damages.

 On the same date, Johnson also signed a document entitled" Rules and Regulations Governing State Medical and Dental Education Loan Program as Administered by the Board of Trustees. "This required Johnson to pursue post-graduate training in family practice, internal medicine, or pediatrics. Both parties acknowledge that the two instruments should be construed jointly.

 Upon graduation, in 1979, Johnson completed his internship at Doctor's Hospital in Tucker, Georgia. Thereafter, he entered a residency in obstetrics and gynecology at Erlanger Medical Center in Chattanooga, Tennessee, finishing in June, 1983. The following month, Johnson opened a practice in Columbia, Mississippi, specializing in obstetrics and gynecology.

 On July 22, 1983, the Board of Trustees found Johnson in breach of contract, effective July 1, 1980, when he failed to pursue post-graduate training in family practice, internal medicine, or pediatrics. It seeks $24,000 in

 unpaid principal, $25,000 in liquidated damages, and $9,187.50 in interest, for a total of $58,187.50, from Johnson.

 In its order sustaining Johnson's motion for summary judgment, the circuit court found that, although Johnson was in breach, he had substantially performed the contract beginning his practice of obstetrics and gynecology in Columbia. Significantly, the Board of Trustees had then just added obstetrics and gynecology as a recognized specialty in new contracts let under the medical education loan program. This resulted from the Board's recognition that small communities needed specialists in obstetrics and gynecology, as well. Yet, we must remember that the Board's action was prospective only, affecting those just entering the program.

 In Jackson v. Caffey, 223 Miss. 368, 371, 78 So. 2d 361, 362 (1955), this Court stated," [S]ubstantial performance is not literal, full or exact performance of all important particulars . . . . "See also, Bevis Construction Co. v. Kittrell, 243 Miss. 549, 558-59, 139 So. 2d 375, 379 (1962). Clearly, the Board did not receive such performance when it contracted for a doctor specializing in the fields of family practice, internal medicine or pediatrics, despite its inclusion of obstetrics and gynecology eight years later.

 Moreover, this Court requires the breaching party to act in good faith, displaying no willful omission, in order for him to invoke the doctrine of substantial performance. Hardin v. Beaman, 49 So. 2d 732, 733 (Miss. 1951); Standard Millwork and Supply Co. v. Miss. Steel & Iron Co., 205 Miss. 96, 110, 38 So. 2d 448, 450 (1949). Here, the circuit court found" a failure of candidness with the Board by the Doctor about his studies . . . . "This quote refers to a series of letters, appearing in the record, which indicate that Johnson, at the time he entered his residency in obstetrics and gynecology, had received at least three requests for information concerning his area of specialization. Finally responding, when threatened with non-compliance by the Board, Johnson stated that he had entered a primary care residency," under the terms of my contract. "Obviously, Johnson misled the Board with respect to his field of study. For this reason, substantial performance is likewise inapplicable.

 In turn, Johnson argues that the regulations governing the loans were arbitrary, and failed to

 accomplish the purpose and intent of the legislature, stated in Miss. Code Ann. 37-109-27 (1972):

 It is the purpose and intent of this chapter to meet the need now existing for the shortage of doctors in the State of Mississippi by increasing the number of medical students in the University of Mississippi School of Medicine and Training Hospital and in various medical schools throughout the nation, and by inducing a sufficient number of graduates from medical schools to return to Mississippi and practice their profession, and thus affording adequate medical care to the people of Mississippi. It is, however, the expressed policy of this state and of this chapter that such scholarships or loans are to be considered as a privilege and that there exists no duty or obligation of the state to afford such scholarships or loans for medical education.

 In particular, he notes that Miss. Code Ann. 37-109-1 to -27 (Medical Education Loans and Scholarships) do not exclude obstetrics and gynecology from post-graduate training. Therefore, the Board ...


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