First National Bank of Waldron v. Whisenhunt

• Decision Date: 25 April 1910
• Citation: 127 S.W. 968,94 Ark. 583
• Parties: FIRST NATIONAL BANK OF WALDRON v. WHISENHUNT
• Court: Arkansas Supreme Court

127 S.W. 968

94 Ark. 583

FIRST NATIONAL BANK OF WALDRON v. WHISENHUNT

Supreme Court of Arkansas

April 25, 1910

Appeal from Scott Circuit Court; Daniel Hon, Judge; affirmed.

Judgment affirmed.

Appellant pro se.

A contract for employment of a school teacher made at a meeting of two directors, of which the third had no notice, will be binding on the district if acquiesced in and ratified by the entire school board. 81 Ark. 143. Fraud must be proved, when relied on, and the burden is on the pleader. 63 Ark. 22. The acceptance and use of the charts by the school board was a ratification of the contract of purchase. 67 Ark. 236.

A. A McDonald, for appellees.

The electors of the district never authorized the purchase of said charts. No two of the directors were together to make a contract. Therefore, none was made, and the district is not bound. 52 Ark. 511; 64 Ark. 489. The first of these notes was barred by the statute of limitations. 52 Ark. 454; 56 Ark 68. There can be no innocent purchaser of paper issued by a municipal corporation. 32 Ark. 634. The contract was made in violation of section 7620, Kirby's Digest, and plaintiff cannot recover.

OPINION

FRAUENTHAL, J.

This was an action instituted by appellant against School District No. 33 of Scott County and its three directors on two warrants or orders of said school district. On December 10, 1902, W. W. Tutwiler made a contract with two of the directors, by which he sold to the school district charts for $ 85. For the purchase money thereof three warrants of the school district were executed, one for $ 35 and the other two for $ 25 each. The warrant for $ 35 was paid immediately and the two other warrants are involved in this suit. These two warrants stated on their face the consideration thereof, and were made payable on August 1, 1903 and 1904, respectively. Some time after the execution of the warrants the charts were received by and were in the possession and use of the school district at the time of the institution of this suit. The warrants were sold and transferred to appellant some time prior to August 1, 1903. It appears from the testimony that the electors of said school district did not authorize the expenditure for said charts at the annual election previous to the alleged purchase thereof nor at any election thereafter; and it also appears from the testimony that no attempt was ever made to secure the approval of the State Superintendent as to the price and merit of said charts. The cause was tried by the court sitting as a jury, who made a finding and rendered judgment in favor of appellees.

A school district is by the statutes of this State made a body corporate; but it is intended as an agency in the administration of public functions. It is a quasi public corporation, and can exercise no powers beyond those expressly conferred by statute, or which arise therefrom by necessary implication. The powers and duties of the directors of a school district are derived only from legislative authority, and they can exercise no power that is not thus expressly or by necessary implication granted by statute. A contract entered into by the directors, therefore, which is beyond the powers conferred on them by statute to make is null and void. Parsel v. Barnes, 25 Ark. 261; Throop on Public Officers, §§ 21, 576; 225 Am. & Eng. Ency. Law 56; 28 Cyc. 279; 1 Dillon on Municipal Corporations, § 25; Central Transportation Co. v. Pullman's Palace Car Co., 139 U.S. 24, 35 L.Ed. 55, 11 S.Ct. 478. And all persons who deal with the school officers are presumed to have full knowledge of the extent of the powers of these officers to make the particular contract. Throop on Public Officers, § 551.

By section 7620 of Kirby's Digest it is provided that the directors of a school district may expend annually out of the common school fund not more than twenty-five dollars for maps, charts, etc.; but it is there provided further that, before such expenditure can be made, the maps, charts, etc., must meet the approval of the State Superintendent in price and merit, and the expenditure must also be authorized by a majority of the electors of the school district at the annual election previous thereto. This statute is an express limitation on the powers of the directors to purchase charts. They had no power, therefore, to purchase these articles until authorized to do so by the electors of the district in the manner provided by the above statute; and the burden was on the plaintiff to establish the fact that they were so authorized. School District v. Perkins, 21 Kan. 536. The evidence in this case tends to show that the directors were not authorized by the electors to purchase the charts; and the contract therefor was therefore made without the power to do so, and was invalid. School District v. Perkins, supra; Western Pub. House v. School Dist., 94 Mich. 262, 53 N.W. 1103; Johnson v. School District, 67 Mo. 319; Clark v. School Directors, 78 Ill. 474; Taylor v. District Tp., 25 Iowa 447; Honaker v. Board of Education, 42 W.Va. 170, 24 S.E. 544.

It is urged by appellant that the contract has been ratified by the receipt and use of the charts by the school district. But where a contract made by the directors of a school district is invalid because it was beyond the scope of their powers, it cannot be ratified by acceptance. The statute expressly provides that such contract can only be authorized by the electors at a meeting regularly called and by a vote cast at an election. This was a necessary condition to be observed before there could be any power to make such a contract, and it could not therefore be ratified except by the observance of those conditions that were essential to the making of a valid contract in the beginning, if it could be ratified in any event. In the case of Thomas v. Railroad Company, 101 U.S. 71, 25 L.Ed. 950, it is said: "The broad doctrine is established that a contract not within the scope of the powers conferred on the corporation cannot be made valid by the assent of every one of the shareholders, nor can it by any partial performance become the foundation of a right of action." Marsh v. Fulton County, 77 U.S. 676, 10 Wall. 676, 19 L.Ed. 1040.

In the case of Taylor v. District Tp., 25 Iowa 447,...