Carter Oil Co. v. Liggett

• Decision Date: 13 June 1939
• Docket Number: No. 25065.,25065.
• Citation: 371 Ill. 482,21 N.E.2d 569
• Parties: CARTER OIL CO. v. LIGGETT et al.
• Court: Illinois Supreme Court

371 Ill. 482

21 N.E.2d 569

CARTER OIL CO.

v.LIGGETT et al.

No. 25065.

Supreme Court of Illinois.

April 17, 1939.

Rehearing Denied June 13, 1939.

Appeal from Circuit Court, Fayette County; Wm. B. Wright, judge.

Suit by the Carter Oil Company against J. B. Liggett and others to enjoin the drilling of an oil and gas well by lessees of a school house site for oil and gas purposes. From a decree dismissing the bill, the plaintiff appeals.

Reversed and remanded, with directions.

SHAW, C. J., dissenting.Walter Davison, of Tulsa, Okl., and Craig & Craig, of Mattoon (L. G. Owen, of Tulsa, Okl., of counsel), for appellant.

Harry I. Hannah and Thomas R. Figenbaum, both of Mattoon, and J. G. Burnside, of Vandalia (Roger Fruin, of Mattoon, of counsel), for appellees.

GUNN, Justice.

The trustees of schools of township 8 north, range 3 east, Fayette county, on June 14, 1937, leased to the Carter Oil Company a school house site in Fayette county containing about one-half an acre, for oil and gas purposes. On April 4, 1938, the lease was amended by correcting the description. Both leases were duly recorded. The site in question was conveyed in 1890 by Eli Dial and wife to the school directors of district No. 5, township 8 north, range 3 east, for a purported consideration of $2 for school purposes, with a reversion to the grantors when the site was no longer used for school purposes. On July 23, 1938, the school directors of said district, in consideration of 1000, leased the same land to appellees for oil and gas. Appellees entered and drilled to a depth of 900 feet, when they were stopped by a temporary injunction at the suit of the appellant, the Carter Oil Company. Upon a trial, the temporary injunction was dissolved and the bill dismissed for want of equity. The principal question involved is whether the trustees of schools or the school directors of the district have the right and power to make the lease in question. The validity of the respective oil leases being the issue, a freehold is involved. Ohio Oil Co. v. Daughetee, 240 Ill. 361, 88 N.E. 818, 36 L.R.A.,N.S., 1108. Appellees further urge that in no event is appellant entitled to relief in equity.

An examination and study of the School law is necessary, as no case is cited directly deciding the principal point involved. Section 16 in every congressional township is reserved for school purposes, by act of Congress. A general statute on schools, in pursuance of the constitution, was enacted by the legislature of Illinois in 1857 (Pub.Laws 1857, p. 259), and again in 1889 (Laws 1889, p. 239). Most of these statutes are still in effect, although some separate enactments of recent date have a bearing on the situation. The original plan seems to have contemplated that the property of the schools should be held and managed by trustees, designated as a corporation, with perpetual succession, and the education afforded in the free schools, supervised by directors who had power to hire teachers, levy taxes, prescribe studies and establish rules for the conduct of schools.

Both the trustees of schools and the school directors were required to make reports to a county superintendent of schools, and, to a certain extent, were subject to his control. Over all was a State Superintendent of Public Instruction. The unit was a school district, comprising territory having a population of 1000, or less. Provision was made, later, for boards of education in cities having a certain population, in place of directors. Looking at one or two isolated sections the division of authority between trustees of schools and school directors may seem obscure, but if all the several provisions are examined in light of the construction placed upon them a general, logical scheme is discerned.

At first the principal source of school funds was the school lands donated by Congress. To produce revenue for school purposes they had to be sold or leased. A school township was a congressional township of 36 sections, so the law provided that trustees be elected in each township. A township might have enough population to require one or many schools, so provision was made for directors to look after the affairs of each school district. But the township money was for the use of all districts in it, and had to be divided among them, and, hence, provision was made to do the many things necessary to handle the school property and conduct schools, through two corporate bodies elected by the people of the township and district, respectively, and the distinction between their powers and duties, with slight variations, has been since maintained in this State.

To make the lease involved in this suit, requires that the proper school corporation shall not only own the land, but also have the power to convey the same to the grantee. It is conceded the land in question is a school site, and a school has been maintained thereon for fifty years. Before discussing the cases cited, a general resume of powers and duties of trustees of schools and school directors, as set out in the statute, would be appropriate.

First, as to the trustees of schools: ‘The school business of all school townships shall be transacted by three trustees. * * * Such trustees shall be a body politic and corporate, by the name of ‘trustees of schools of township No. ___.’ * * * Such corporation shall have perpetual existence, with power to sue and be sued, and to plead and be impleaded, in all courts and places where judicial proceedings are had.' Ill.Rev.Stat.1937, chap. 122, § 20. They shall ascertain the amount of funds subject to distribution, and appropriate and distribute same as provided by law and among the school districts. Section 35. The trustees may receive gifts, grants, donations or devises for the use of any school or library, or for any other school purpose. They shall be and are hereby invested in their corporate capacity with the title of all school buildings and school sites. Section 39. They may purchase real estate in satisfaction of any judgment in an action in which they are parties (section 42), and make settlement, and take deeds to real estate in settlement, with persons indebted to them (section 43) and sell or lease land thus obtained. Section 44. When required for road purposes the trustees, with the consent of the school directors, may sell and convey school sites or school lands to the State, county or road district. Section 44a. The trustees may change the boundaries of school districts by dividing, consolidating or detaching, upon proper petitions. Section 46. In like manner they may create new districts (section 46) and make distributions to such new districts of tax funds or other funds. Section 64. They elect the township treasurer (section 67), and designate the bank in which the treasurer may deposit money. Section 71. Mortgages to secure payment of school funds loaned are made to the trustees, suits for same are brought in their names, and mortgages, notes and securities are made payable to them. Section 76. The treasurer makes a report of the fiscal affairs of the township and the school district to the trustees. Section 79. The trustees may lease the school land, donated by the government (section 242) and dedicate parts thereof for street or highway purposes if they believe the benefit derived therefrom will compensate for the strip dedicated. Section 260. The trustees by proper writing shall declare title to a school site is held for joint use of a school district, when they have agreed upon joint use of any school site (section 344a), and when the school directors of one school have agreed with another district for the sale of a school site, the trustees shall, in writing, transfer the use of such site to the purchasing district (section 344b), and where a school district agrees with a high school district for the joint use of school property, real or personal, the agreement is only valid upon receiving the written consent of the trustees.

The foregoing are the principal statutory enactments relating to the powers and duties of school trustees up to 1937, when section 219 of the School law (section 242) was amended by granting school trustees, in addition to power to lease school lands and lands acquired by compromise or settlement, the authority to lease school real estate to which they hold title, for drilling for oil or gas, whether said lands are being used for school purposes or not, and the amendment validates all such leases theretofore executed. Laws 1937, p. 1089 (section 242).

Now, as to the school directors: In districts of 1000 population or less, and not governed by a special act, there shall be elected a board of school directors of three members. Ill.Rev.Stat.1937, chap. 122, § 111. They shall be a body politic by the name of ‘School directors of district No. ___, county of _____, and State of Illinois.’ Section 112. Their duties are enumerated in section 122, including raising revenue, hiring teachers and maintaining schools. There is no duty specified as to school houses, except keeping fences around school grounds in good repair. By section 123 the powers of school directors are enumerated, and by sub-paragraph 10 they have control and supervision of all school houses, and, when not occupied by schools, may grant the temporary use of them for religious meetings, literary societies, lectures, concerts and recreational and social activities, etc. The foregoing, with minute provisions for supervision and control of schools, are the principal provisions as to school directors until 1917, when two laws were enacted giving school directors power to (a) acquire by gift, donation, devise, purchase, or otherwise, real estate for the purpose of play grounds, athletic fields, etc., and equip the same, the cost to be paid from building fund (Ill.Rev.Stat.1937, chap. 122, § 339); (b) to take title to real estate or personal property given or devised, when the deed or will declares...