Bunker R-III School Dist. v. Hodge

• Court: Missouri Court of Appeals
• Writing for the Court: CROW; GREENE
• Citation: Bunker R-III School Dist. v. Hodge, 666 S.W.2d 20 (Mo. App. 1984)
• Decision Date: 16 February 1984
• Docket Number: No. 13195,R-III,13195
• Parties: 16 Ed. Law Rep. 1406 BUNKERSCHOOL DISTRICT, et al., Appellants, v. J.D. HODGE, et al., Respondents.

Page 20

666 S.W.2d 20

16 Ed. Law Rep. 1406

BUNKER R-III SCHOOL DISTRICT, et al., Appellants, v. J.D. HODGE, et al., Respondents.

No. 13195.

Missouri Court of Appeals,

Southern District,

Division Three.

Feb. 16, 1984.

L. Dwayne Hackworth, Randy P. Schuller, Hackworth & Schuller, Piedmont, for appellants.

Bonnie Keaton, Eminence, for respondents.

CROW, Presiding Judge.

This is the second case involving apportionment of "national forest reserve funds" among four school districts by the Shannon County Court. The first was Eminence R-1 School District v. Hodge, et al., 635 S.W.2d 10 (Mo.1982), hereafter "Hodge-1."

16 U.S.C. § 500, as amended Oct. 22, 1976, Pub.L. 94-588, § 16, 90 Stat. 2961, ¹ provides that 25 per cent of all moneys received by the United States government during any fiscal year from each national forest shall be paid to the state or territory in which such national forest is situated, to be expended as the state or territorial legislature may prescribe for the benefit of the public schools and public roads of the county or counties in which such national forest is situated.

Inasmuch as national forest land is situated in several Missouri counties, Missouri receives such funds. Part of the Mark Twain National Forest lies in Shannon County. Accordingly, Shannon County receives a share of the funds.

The General Assembly has ordained that counties receiving such funds shall expend 75 per cent thereof for public schools and 25 per cent for roads. § 12.070, RSMo 1978. ² In order to be eligible to share in the 75 per cent allocated for schools, a school district must lie or be situated partly or wholly within or adjacent to the national forest in the county. § 12.070; Hodge-1, 635 S.W.2d at 11.

Three school districts in Shannon County lie partly within the Mark Twain National Forest: Bunker R-III ("Bunker"), Mountain View-Birch Tree R-9 ("Mountain View"), and Winona R-III ("Winona"). Another Shannon County school district, Eminence R-1 ("Eminence"), lies adjacent to the Mark Twain National Forest, but no part of the Eminence district lies within the Forest.

In Hodge-1, our Supreme Court faced two issues:

(1) Under § 12.070, can the forest funds be legally distributed by the Shannon County Court so as to totally exclude Eminence?

(2) Under § 12.070, may the Shannon County Court, in its discretion, distribute some portion of the forest funds to Eminence?

Holding that the construction of a state revenue statute was involved, Mo. Const. art. V, § 3, Hodge-1, 635 S.W.2d at 11, our Supreme Court answered both questions, "Yes."

Because § 12.070 is silent as to the method of distribution of forest funds, the Supreme Court in Hodge-1 had to ascertain the legislative intent behind that section. The Supreme Court found the intent of the General Assembly was to compensate those school districts most heavily burdened or financially affected by the presence of the national forest. Hodge-1, 635 S.W.2d at 13. The Supreme Court held that the General Assembly intended to repose in the county court of each county receiving forest funds the discretion to determine the relative impact of the national forest on each eligible district, and then to determine how much of the money each eligible district should receive. Id. at 13. The Supreme Court added that the county court can determine, in its discretion, that any eligible district is not in need of or entitled to receive forest funds. Id. The county court's apportionment can be judicially disturbed only if the county court abuses or arbitrarily exercises its discretion. Id. at 13.

The appeal now before us arises from a suit by Bunker, Mountain View and Winona ("plaintiffs") against the three judges of the Shannon County Court, the county treasurer and the county clerk ("defendants"). The suit was triggered by an order of the Shannon County Court entered August 12, 1982. That order apportioned $187,610 of forest funds between plaintiffs and Eminence. ³ Fifteen per cent thereof ($28,144) was designated "timber" funds, being attributable to revenue from timber sales. The remaining 85 per cent ($159,466) was designated "mineral" funds, being attributable to revenue from mining activities.

The timber funds were ordered distributed according to an "acreage" formula. Each district was awarded a fraction of the timber funds in which the numerator was the number of acres of national forest in that part of the district lying in Shannon County, ⁴ and the denominator was the total acres of national forest in Shannon County. Obviously, Eminence was allowed no timber funds.

The mineral funds were ordered distributed according to an "inverse proportional ratio" formula. We do not find that formula in the pleadings or evidence, however plaintiffs' brief states that the school district with the highest assessed valuation was used as a reference so that it received one share or unit, and the other districts received that number of shares as was represented by a fraction in which the highest assessed valuation was the numerator and each other district's assessed valuation was the denominator. Defendants do not challenge that explanation of the formula. Consequently, we assume plaintiffs' explanation is correct.

The distribution in the order of August 12, 1982, was:

School         Timber   Mineral
                District       Funds    Funds        Total
                -------------  -------  --------  --------------
                Winona         $15,570  $79,134    $94,704
                Bunker           8,046   11,990     20,036
                Mountain View    4,528   19,664     24,192 5
                Eminence             0   48,678     48,678
                -------------  -------  --------  --------------
                Total          $28,144  $159,466  $187,610
                

⁵

Plaintiffs filed this suit the day after the order was entered, seeking a declaration that the vote and the order were illegal, void and of no force and effect, and that any attempt to disburse forest funds under the inverse proportional ratio formula was illegal and void. Plaintiffs also prayed for a temporary and permanent injunction prohibiting defendants from disbursing any forest funds pending the outcome of the suit.

The trial court entered a temporary restraining order as prayed. In due course, the cause was tried to the court, and thereafter the court entered its conclusions of law and judgment. The court ruled that the Shannon County Court can determine in its discretion that any eligible school district is entitled to receive forest funds, and that no particular method of distribution is mandated. The trial court added that it could not find, as a matter of law, that the formula for distribution by the Shannon County Court amounted to an abuse or an arbitrary exercise of discretion. The trial court denied plaintiffs' prayer for an injunction and ordered the action dismissed. This appeal followed.

The first issue we confront is whether we have jurisdiction. We must decide that issue even though neither side has challenged our jurisdiction. In re Estate of DeWitt, 591 S.W.2d 273, 275 (Mo.App.1979); Kansas City v. Howe, 416 S.W.2d 683, 686 (Mo.App.1967).

The Supreme Court of Missouri has exclusive appellate jurisdiction in all cases involving the construction of the revenue laws of this state. Mo. Const. art. V, § 3; Noranda Aluminum, Inc. v. Missouri Department of Revenue, 599 S.W.2d 1, 1-2 (Mo.1980). As observed earlier, our Supreme Court in Hodge-1 held that the issues there involved the construction of a Missouri revenue statute (§ 12.070). Hodge-1, 635 S.W.2d at 11.

Here, however, by reason of the manner in which we resolve this appeal, construction of the revenue laws is not involved, and as there is no other basis on which jurisdiction of this appeal would lie in the Supreme Court, we have jurisdiction. Mo. Const. art. V, § 3.

As noted earlier, Eminence receives $48,678 under the order of August 12, 1982. The superintendent of the Eminence district was present when the Shannon County Court voted on that apportionment, and the superintendent heard the figures as they were read. Eminence was apparently satisfied, because, so far as the record shows, Eminence--unlike plaintiffs--took no action to challenge the order. However, should we agree with plaintiffs that the order is invalid, the county court would have to reconsider apportionment of the forest funds, in which event Eminence could receive more, less, the same amount, or nothing. Consequently, Eminence may be substantially affected by the outcome of this litigation, depending, of course, on what the outcome is.

Plaintiffs did not name Eminence as a defendant, and Eminence is not now, and never has been, a party to this cause. ⁶ Nothing in the record suggests that defendants raised any issue about the absence of Eminence in the trial court, and defendants have not done so here.

Nonetheless, it has been held that the absence of a necessary party to an action is fundamental and jurisdictional to such an extent it must be considered by an appellate court. Shepherd v. Department of Revenue, 377 S.W.2d 525, 528 (Mo.App.1964). Accordingly, we inquire sua sponte whether Eminence is a necessary party.

Rule 52.04(a) ⁷ provides, in pertinent part, that a person shall be joined in the action if "... he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter impair or impede his ability to protect that interest...." Such a party is a necessary party. Kingsley v. Burack, 536 S.W.2d 7, 12 (Mo. banc 1976).

The subject of this action is, of course, $187,610 in forest funds, and Eminence presumably claims an interest therein (the $48,678 apportioned to it in the order of August 12, 1982). ⁸ A final judgment vacating the order of August 12, 1982, would obviously impair, indeed destroy, Eminence's ability to protect its interest in the allocation granted by that order. It thus appears that Eminence is a necessary party.

An analogous case is School Dist. No. 24 of...